2003
DOI: 10.3141/1825-01
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Pricing Commuter, Intercity, and Freight Trains in a Terminal Railway Context: An Approach

Abstract: The cost-of-service (or fully allocated cost) pricing model has been criticized in the economics literature. The criticisms generally focus on the issues of cross-subsidization problems from using average costs and economically inefficient pricing. A fully allocated cost model, applied to a terminal railroad setting, is presented that can substantively overcome these criticisms by using a resource consumption approach for key cost drivers. A successful implementation of a new cost recovery system in Toronto, O… Show more

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