Incentive Regulatory Policies: The Case of Public Transit Systems in France

Gagnepain, Philippe; Ivaldi, Marc

doi:10.2307/3087477

Cited by 151 publications

(95 citation statements)

References 18 publications

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“…Among them, Parker and Roller (1997) analyze the impact of regulatory changes on the competitiveness of mobile telecommunications markets. Gagnepain and Ivaldi (2002) show how firms' cost reducing activity is related to the regulatory contracts set by public authorities in the public transit industry. 9 This assumption is justifiable, given that what matters in our analysis is the difference e i A − e i B .…”

Section: Competitive Pressure and Cost Reductionmentioning

confidence: 99%

Entry, Costs Reduction, and Competition in the Portuguese Mobile Telephony Industry

Gagnepain

Pereira²

2005

SSRN Journal

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We study the effect of entry on costs and competition in the Portuguese mobile telephony industry. We construct and estimate a model that includes demand, network, and cost equations. The latter accounts for inefficiency and cost reducing effort. Our results suggest that the entry of a third operator in 1998 lead to significant cost reductions and fostered competition. We also show that failure to account for cost reducing effort leads to biased estimates of competition in the industry. Finally, we also find that our estimated price-cost margins are similar to hypothetical Nash margins, if firms are patient and have optimistic beliefs about the industry growth.

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Section: Competitive Pressure and Cost Reductionmentioning

confidence: 99%

Entry, Costs Reduction, and Competition in the Portuguese Mobile Telephony Industry

Gagnepain

Pereira²

2005

SSRN Journal

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“…For example, although in France more than two thirds of all operators are private firms, most decisions on fares, routes and schedules are taken by local government authorities under fixed price or cost-plus contracts. For a detailed description of the French system, see Gagnepain and Ivaldi (2002).…”

Section: Frequency and Information Provision By A Price-regulated Firmmentioning

confidence: 99%

Information provision by regulated public transport companies

Borger

Fosgerau

2012

Transportation Research Part B: Methodological

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Research highlightsWe study the interaction between pricing, frequency of service and information provision by public transport firms offering scheduled services, and we do so under various regulatory regimes. The model assumes that users can come to the bus stop or rail station at random or they can plan their trips; the fraction of users who plan their trips is endogenous and depends on the frequency of service and on the quality of information provided. Four institutional regimes are considered, reflecting various degrees of government regulation. A numerical example illustrates the theoretical results. Findings include the following. First, fare regulation induces the firm to provide less frequency and less information than is socially optimal. Second, if information and frequency did not affect the number of planning users a higher fare always induces the firm to raise both frequency and the quality of information. With endogenous planning, however, this need not be the case, as the effect of higher fares strongly depends on how frequency and information quality affect the number of planners. Third, a profit-maximizing firm offers more information than a fare-regulated firm. Fourth, if the agency regulates both the fare and the quality of information then more stringent information requirements induce the firm to reduce frequency; this strongly limits the welfare improvement of information regulation. Finally, of all institutional structures considered, socially optimal fares, frequency and quality of information stimulate passengers least to plan their trips, because the high frequency offered reduces the benefits of trip planning. *Highlights Information provision by regulated public transport companies (*) Bruno De Borger and Mogens Fosgerau AbstractWe study the interaction between pricing, frequency of service and information provision by public transport firms offering scheduled services, and we do so under various regulatory regimes. The model assumes that users can come to the bus stop or rail station at random or they can plan their trips; the fraction of users who plan their trips is endogenous and depends on the frequency of service and on the quality of information provided. Four institutional regimes are considered, reflecting various degrees of government regulation. A numerical example illustrates the theoretical results. Findings include the following. First, fare regulation induces the firm to provide less frequency and less information than is socially optimal. Second, if information and frequency did not affect the number of planning users a higher fare always induces the firm to raise both frequency and the quality of information. With endogenous planning, however, this need not be the case, as the effect of higher fares strongly depends on how frequency and information quality affect the number of planners. Third, a profit-maximizing firm offers more information than a fare-regulated firm. Fourth, if the agency regulates both the fare and the quality of information then more stringent in...

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“…A first bunch of papers deals with the LPT companies' cost structure, with a focus on the estimation of variable and total costs [5]- [7]. Some papers focus on the most the appropriate output measure, i.e., supply-side indicators -such as vehicle-kilometer [8], seat-kilometer [9] or total-seat-kilometer [10] -or demand-side measures, such as passenger-trips or passenger-kilometer [11]. More recently, a number of papers included hedonic characteristics among the explanatory variables -such as service frequency, average commercial speed, service size and the average fleet age are the most commonly employed [7], [12], [13], or size [6], [7].…”

Section: Introductionmentioning

confidence: 99%

Key-Cost Drivers Selection in Local Public Bus Transport Services Through Machine Learning

Avenali

Catalano

D’Alfonso

et al. 2017

WIT Transactions on the Built Environment

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This paper is aimed at developing a workable model for the identification of key-cost drivers in the Italian Local Public Bus Transport (LPBT) sector. Disaggregated information about costs, technical characteristics and environmental characteristics have been collected by means of questionnaires sent to LPBT companies producing more than 500 million bus revenue kilometres in Italy in 2011. A supervised regression model is built by training a regularized Artificial Neural Network in order to determine the quantitative and qualitative characteristics that contribute to explaining the variability of the driving personnel and the unit cost of the fleet (which usually covers more than 50% of the total economic cost) and the remaining portion of the unit cost. The proposed models could be an effective and simple tool for local authorities to validate reserve prices in tender procedures. Keywords: standard costs, local public transport, fiscal federalism, cost drivers, machine learning. INTRODUCTIONIn Italy, the Local Public Transport (LPT) industry reform bill (1997) touched upon two dimensions: the allocation of public funds to Regions -and, in turns, to Local Authorities (LAs) -as well as the definition of an upper bound to public compensations to LPT firms. Although the reform bill stated that all subsidized LPT services should have been tendered off by January 2004, later legislative interventions left discretion to local governments about whether tendering out concessions or adopting in-house provision. Some competitive tendering took place after 1998 [1]. However, at present, the amount of LPT services that are tendered off is negligible with respect to in house provision that still prevails, especially in large cities [2]. In recent years, a number of policy interventions reaffirmed the political aim to improve market-oriented mechanisms in the allotment of LPT services; moreover, several parliamentary acts established that the maximum economic compensation to LPT firms should be based on standard costs (Law number 135/2012). The standard cost is defined as the cost of a LPT service provided by a reasonably efficient operator given a pre-specified level of service quality. However, at present, the Italian policy makers have not yet promulgated an appropriate methodology for the calculation of unit standard costs.Our paper contributes to the literature since we develop two Top-Down cost models, based on recent advancements of machine learning approaches [3], in order to identify key cost drivers with respect to different cost items. The proposed models could be an effective and simple tool for LAs to validate reserve prices in tender procedures. Detailed information about costs has been gathered in order to fairly compute the total economic costs of the LPBT services; the collected economic and transport data relates to LPBT companies producing more than 500 million of bus revenue kilometers (BRK) in Italy in 2011 (approximately 30% of the overall amount of BRK offered in Italy for bus LPT services).Thi...

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Incentive Regulatory Policies: The Case of Public Transit Systems in France

Cited by 151 publications

References 18 publications

Entry, Costs Reduction, and Competition in the Portuguese Mobile Telephony Industry

Entry, Costs Reduction, and Competition in the Portuguese Mobile Telephony Industry

Information provision by regulated public transport companies

Key-Cost Drivers Selection in Local Public Bus Transport Services Through Machine Learning

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