DP5396 Competition for Railway Markets: The Case of Baden-Württemberg

Author(s): Rafael Lalive, Armin Schmutzler
Publication Date: December 2005
Keyword(s): competition for the market, liberalization, passenger railways, procurement auctions
JEL(s): D43, D44, R48
Programme Areas: Public Economics, Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=5396

This paper studies the effects of introducing competition for local passenger railway markets in the German state of Baden-Württemberg. We compare the evolution of the frequency of service on lines that were exposed to competition for the market and lines that were not. Our results suggest that the competitively procured lines enjoyed a stronger growth of the frequency of service than those that were not procured competitively, even after controlling for various line characteristics that might have an independent influence on the frequency of service. Our results further suggest that the effects of competition may depend strongly on the operator.