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Estimating the marginal maintenance cost of rail infrastructure usage in Sweden: does more data make a difference?
Swedish National Road and Transport Research Institute, Society, environment and transport, Transport economics, TEK.
Swedish National Road and Transport Research Institute, Society, environment and transport, Transport economics, TEK.ORCID iD: 0000-0002-5814-917X
2015 (English)In: Economics of Transportation, ISSN 2212-0122, E-ISSN 2212-0130Article in journal (Refereed) In press
Abstract [en]

This paper updates knowledge about the marginal cost of railway maintenance. Using a panel dataset comprising 16 years, we test whether more data makes a difference to conclusions. In contrast to previous estimates using a shorter panel, maintenance costs are now demonstrated to exhibit a positive dynamic effect; an increase in maintenance cost during one year indicates the need for more maintenance also the next year. Moreover, the marginal cost from the dynamic model is larger than its static counterpart. We conclude that the use of dynamic models on longer time series may have charging implications in several EU member states, considering that their track access charges are based on econometric studies that use static models and short panel datasets.

Place, publisher, year, edition, pages
Elsevier, 2015.
Keyword [en]
Economics of transport, Input data, Maintenance, Cost, Mathematical model
National Category
Economics
Research subject
J00 Railway: General works, surveys, comprehensive works, J13 Railway: Economics
Identifiers
URN: urn:nbn:se:vti:diva-11887DOI: 10.1016/j.ecotra.2017.05.001Scopus ID: 2-s2.0-85019555205OAI: oai:DiVA.org:vti-11887DiVA: diva2:1106153
Available from: 2017-06-07 Created: 2017-06-07 Last updated: 2017-10-31Bibliographically approved
In thesis
1. Reforming a publicly owned monopoly: costs and incentives in railway maintenance
Open this publication in new window or tab >>Reforming a publicly owned monopoly: costs and incentives in railway maintenance
2015 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

The railway system is often considered to be an industry where a monopoly occurs “naturally”, which can explain the public ownership and the use of regulations. However, railways in Europe have been subject to reforms during the last three decades. The use of tendering has increased, which is a way of introducing competition for the market in absence of competition within the market. Still, contracting out services previously produced in-house places a heavy burden on the client, where contract design and its incentive structures can be decisive for the outcome of the reform.

This dissertation provides empirical evidence on costs and incentives in a publicly owned monopoly that is subject to reforms, namely the provision of railway maintenance in Sweden.

Essay 1 estimates the effect of exposing rail infrastructure maintenance to competitive tendering. The results show that this reform reduced maintenance costs in Sweden by around 11 per cent over the period 1999-2011, without any associated fall in the available measures of quality.

Essay 2 estimates the relative cost efficiency between and within maintenance regions in Sweden. The results indicate considerable efficiency gaps together with economies of scale not being fully exploited.

Essay 3 analyses the effect of incentive structures in railway maintenance contracts. An increase in the power of the incentive scheme reduces the number of infrastructure failures according to the results. In addition, the estimated effect of the performance incentive schemes suggests that more effort towards preventing train delays is made at the expense of preventing other failures.

Essay 4 comprises an estimation of marginal costs of rail maintenance. The static model produces slightly lower marginal costs compared to previous estimates on Swedish data. The results from the dynamic model show that an increase in maintenance costs in year t - 1 predicts an increase in maintenance costs in year t. Indeed, there is an intertemporal effect that depends on the performed maintenance activities (governed by the contract design).

Place, publisher, year, edition, pages
Örebro: Örebro university, 2015. 26 p.
Keyword
Railway track, Maintenance, Contract, Incentive (reward), Competition, Cost, Quality, Economic efficiency
National Category
Economics
Research subject
J00 Railway: General works, surveys, comprehensive works, J01 Railway: Railway track; J00 Railway: General works, surveys, comprehensive works, J13 Railway: Economics
Identifiers
urn:nbn:se:vti:diva-12476 (URN)978-91-7529-106-2 (ISBN)
Public defence
2015-12-21, Forumhuset, Biografen, Örebro universitet, 10:00 (English)
Opponent
Supervisors
Available from: 2017-10-31 Created: 2017-10-31 Last updated: 2017-11-06Bibliographically approved

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Citation style
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