Effect of constable market on the regional railway market: Evidence from Europe

The presentation explores the effect of the competitive tender (contestable market) for users through prices and frequencies in the regional railway passenger market. The analysis is original by an extended perimeter to seven European countries (France, Germany, Italy, Netherlands, Sweden, Switzerland, UK) and a total of 103 routes mixing market open to competition by tendering with market still under monopoly. Data are cross sectional and have been selected for one day. The method is based on an econometric analysis (Sureg) developed for other modes (air, coach) but never yet applied to the rail market and its specificities in terms of competition. For the regional services where competition is "for the market", the competition is analyzed through a dummy as a threat to lose the tender. Intermodal competition is limited to the coach services (dummy) and carpooling services (dummy). Results show that the threat of intra-modal competition can increase price for users but have no significant effect on frequencies. The analysis country by country highlights a similar performance for Sweden and Switzerland in spite of high differences in terms of competition. It suggests that the ability to negotiate contracts of public authorities and political choices can be more determinant than potential competition. Finally, effect of intermodal competition are weak mainly because of a limited offer. Results show that the probability to find a carpooling service increases when prices of train are increasing.