The impact of optimal rail access charges on frequencies and fares. (June 2021)

• Record Type: Journal Article
• Authors: Börjesson, Maria; Rushid, Ajsuna R.; Liu, Chengxi
• Is Part Of: Economics of transportation. Volume 26/27(2021)
• Publication Date: 2021-06
• Subjects: Rail access charges -- Track charges -- Optimal pricing -- Vertical separation -- Intermodal competition -- Open access; Transportation -- Periodicals; 388.049
• DOI: 10.1016/j.ecotra.2021.100217
• Languages: English
• ISSNs: 2212-0122

Abstract

Abstract: Sweden has been a front runner in vertical separation. We use data from the business long-distance corridor in Sweden to calibrate and define a demand and supply model. We simulate how the profit, welfare, fares, frequencies, modal shares and train size depend on the level of the track charges. We simulate the welfare optimal track charges, given different levels of congestion on the track, hence using the charges as a pricing instrument to allocate the train slots efficiently. We find that increases in charges have a limited impact on fares but larger impacts on the frequency. When the length of the trains can be extended and when the crowding penalty is high, the impact of higher track charges on the frequencies is larger. Higher track charges increase the length of the trains if possible. The intermodal competition from road and air has a significant impact on rail fares. Highlights: We model how higher track charges impact profit-optimizing fares and frequency. We simulate optimal track charges for given congestion levels on the tracks. Track charges have a modest effect on fares but larger effect on frequencies. Higher track charges increase the occupancy rate and length of the trains. Intermodal competition from road and air has a significant impact on fares.