IDEAS home Printed from https://ideas.repec.org/p/hhs/ctswps/2018_020.html
   My bibliography  Save this paper

The marginal cost of track reinvestments in the Swedish railway network: Using data to compare methods

Author

Listed:
  • Odolinski, Kristofer

    (CTS - Centre for Transport Studies Stockholm (KTH and VTI))

  • Yarmukhamedov, Sherzod

    (The Swedish National Audit Office)

  • Nilsson , Jan-Eric

    (CTS - Centre for Transport Studies Stockholm (KTH and VTI))

  • Haraldsson, Mattias

    (CTS - Centre for Transport Studies Stockholm (KTH and VTI))

Abstract

In this study, we analyze the difference between survival and corner solution models in estimating the marginal cost of reinvestments. Both approaches describe the reinvestment process in rather intuitively similar ways but have several methodological distinctions. We use Swedish railway data on track segment and section levels over the period 1999-2016 and focus on reinvestments in track superstructure. Results suggest the marginal costs from survival and corner solution models are SEK 0.0041 and SEK 0.0103, respectively. The conclusion is that the corner solution model is more appropriate, as this method consider the impact traffic has on the risk of reinvestment as well as on the size of the reinvestment cost. The survival approach does not consider the latter, which is problematic when we have systematic variations in costs due to traffic and infrastructure characteristics.

Suggested Citation

  • Odolinski, Kristofer & Yarmukhamedov, Sherzod & Nilsson , Jan-Eric & Haraldsson, Mattias, 2018. "The marginal cost of track reinvestments in the Swedish railway network: Using data to compare methods," Working papers in Transport Economics 2018:20, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    • Handle: RePEc:hhs:ctswps:2018_020
    as

    Download full text from publisher

    File URL: https://www.cts.kth.se/polopoly_fs/1.850966!/CTS2018-20.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Andersson, Mats & Smith, Andrew & Wikberg, Åsa & Wheat, Phill, 2012. "Estimating the marginal cost of railway track renewals using corner solution models," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(6), pages 954-964.
    2. Andersson, Mats & Björklund, Gunilla, 2012. "Marginal railway track renewal costs: a survival data approach," Working papers in Transport Economics 2012:29, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    3. Johansson, Per & Nilsson, Jan-Eric, 2004. "An economic analysis of track maintenance costs," Transport Policy, Elsevier, vol. 11(3), pages 277-286, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marc Gaudry & Bernard Lapeyre & Emile Quinet, 2015. "Infrastructure maintenance, regeneration and service quality economics: A rail example," PSE Working Papers halshs-00559637, HAL.
    2. Marc Gaudry & Emile Quinet, 2015. "Correlation within SNCF administrative regions among track segment maintenance cost equation residuals of a country-wide model," Working Papers halshs-01112249, HAL.
    3. Andersson, Mats & Björklund, Gunilla, 2012. "Marginal railway track renewal costs: a survival data approach," Working papers in Transport Economics 2012:29, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    4. Odolinski, Kristofer & Boysen, Hans E., 2018. "Railway line capacity utilisation and its impact on maintenance costs," Working papers in Transport Economics 2018:10, CTS - Centre for Transport Studies Stockholm (KTH and VTI), revised 30 Oct 2018.
    5. Andersson, Mats & Björklund, Gunilla & Haraldsson, Mattias, 2016. "Marginal railway track renewal costs: A survival data approach," Transportation Research Part A: Policy and Practice, Elsevier, vol. 87(C), pages 68-77.
    6. Odolinski, Kristofer & Nilsson, Jan-Eric & Yarmukhamedov, Sherzod & Haraldsson, Mattias, 2020. "The marginal cost of track renewals in the Swedish railway network: Using data to compare methods," Economics of Transportation, Elsevier, vol. 22(C).
    7. Marc Gaudry & Emile Quinet, 2015. "Correlation within SNCF administrative regions among track segment maintenance cost equation residuals of a country-wide model," PSE Working Papers halshs-01112249, HAL.
    8. Talebian, Ahmadreza & Zou, Bo & Peivandi, Ahmad, 2018. "Capacity allocation in vertically integrated rail systems: A bargaining approach," Transportation Research Part B: Methodological, Elsevier, vol. 107(C), pages 167-191.
    9. Odolinski, Kristofer & Wheat, Phill, 2018. "Dynamics in rail infrastructure provision: Maintenance and renewal costs in Sweden," Economics of Transportation, Elsevier, vol. 14(C), pages 21-30.
    10. Odolinski, Kristofer & Nilsson, Jan-Eric, 2017. "Estimating the marginal maintenance cost of rail infrastructure usage in Sweden; does more data make a difference?," Economics of Transportation, Elsevier, vol. 10(C), pages 8-17.
    11. Nilsson , Jan-Eric Nilsson & Isacsson , Gunnar & Haraldsson, Mattias & Nerhagen, Lena & Odolinski, Kristofer & Swärdh, Jan-Erik & Vierth, Inge & Yarmukhamedov, Sherzod & Österström, Johannes, 2018. "The efficient use of infrastructure – is Sweden pricing traffic on its roads, railways, waters and airways at marginal costs?," Working papers in Transport Economics 2018:2, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    12. Link, Heike & Götze, Wolfgang & Himanen, Veli, 2009. "Estimating the marginal costs of airport operation using multivariate time series models with correlated error terms," Journal of Air Transport Management, Elsevier, vol. 15(1), pages 41-46.
    13. Bugarinovic, Mirjana & Boskovic, Branislav, 2015. "A systems approach to access charges in unbundling railways," European Journal of Operational Research, Elsevier, vol. 240(3), pages 848-860.
    14. Odolinski, Kristofer & Smith, Andrew & Wheat, Phill & Nilsson, Jan-Eric & Dheilly, Clement, 2023. "Damage or no damage from traffic: Re-examining marginal cost pricing for rail signalling maintenance," Transport Policy, Elsevier, vol. 131(C), pages 13-21.
    15. Odolinski, Kristofer & Wheat, Phillip, 2016. "Dynamics in rail infrastructure provision: maintenance and renewal costs in Sweden," Working papers in Transport Economics 2016:23, CTS - Centre for Transport Studies Stockholm (KTH and VTI), revised 11 Dec 2017.
    16. Scialà, Antonio & Stroffolini, Francesca, 2024. "The economics of regional railway regulation under vertical separation," Economics of Transportation, Elsevier, vol. 37(C).
    17. Franklin, Francis & Nemtanu, Florin & Teixeira, Paulo F., 2013. "Rail infrastructure, ITS and access charges," Research in Transportation Economics, Elsevier, vol. 41(1), pages 31-42.
    18. Gillies-Smith, Andrew & Wheat, Phill, 2016. "Do network industries plan to eliminate inefficiencies in response to regulatory pressure? The case of railways in Great Britain," Utilities Policy, Elsevier, vol. 43(PB), pages 165-173.
    19. Gerhard Munduch & Alexander Pfister & Leopold Sögner & Alfred Stiassny, 2002. "Estimating Marginal Costs for the Austrian Railway System," Department of Economics Working Papers wuwp078, Vienna University of Economics and Business, Department of Economics.
    20. Heike Link, 2003. "Estimates of marginal infrastructure costs for different modes of transport," ERSA conference papers ersa03p75, European Regional Science Association.

    More about this item

    Keywords

    railways; reinvestment; renewal; survival model; corner solution model; two-part model; marginal cost;
    All these keywords.

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:ctswps:2018_020. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CTS (email available below). General contact details of provider: http://www.cts.kth.se/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.