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Fixed effects estimation of marginal railway infrastructure costs in Sweden
KTH, School of Architecture and the Built Environment (ABE), Transport and Economics (closed 20110301), Transport and Location Analysis (closed 20110301).
2007 (English)Report (Other academic)
Abstract [en]

New railway legislation in Sweden has increased the need for transparent access charges on the Swedish railway network. We estimate cost functions for infrastructure operation, maintenance and renewal in the Swedish national railway network, using unobserved effects models and calculate marginal costs for railway infrastructure wear and tear. We find evidence of unobserved fixed effects at a track section level for infrastructure operation and maintenance costs. The estimated weighted average marginal infrastructure operation cost is SEK 0.12 per train kilometre and the estimated marginal maintenance cost is SEK 0.0073 per gross tonne kilometre. Altogether, the results indicate that the current charge for railway infrastructure wear and tear in Sweden is below marginal cost.

Place, publisher, year, edition, pages
VTI , 2007. Vol. 11
Series
Working Papers, 2007:11
Keyword [en]
Railway; Infrastructure operation; Maintenance; Renewal; Marginal costs; Fixed effects
National Category
Engineering and Technology
Identifiers
URN: urn:nbn:se:kth:diva-7191OAI: oai:DiVA.org:kth-7191DiVA: diva2:12126
Note
QC 20120515Available from: 2007-05-28 Created: 2007-05-28 Last updated: 2012-05-15Bibliographically approved
In thesis
1. Empirical Essays on Railway Infrastructure Costs in Sweden
Open this publication in new window or tab >>Empirical Essays on Railway Infrastructure Costs in Sweden
2007 (English)Doctoral thesis, comprehensive summary (Other scientific)
Abstract [en]

The subject of this thesis concerns pricing the use of transport infrastructure. We are empirically investigating the relationship between railway traffic volumes and infrastructure management costs. More specifically, we are interested in estimating the change in infrastructure management costs from marginal variations in traffic volumes, i.e. to estimate the marginal cost of railway infrastructure wear and tear. Both Europe and Sweden have moved towards a marginal cost based transport pricing policy, thus driving the need for more empirical work on rail infrastructure costs to underpin the level of a wear and tear charge. The thesis consists of five papers. In paper I, the data situation for planning railway maintenance and renewal is surveyed internationally. The survey indicates that most infrastructure managers are still in the data gathering phase, rather than ready to use modern computerised planning tools to make sound decisions in the field of maintenance and renewal. In paper II, we investigate the data situation for infrastructure cost analysis in Sweden. A panel data set that consists of cost, traffic and infrastructure information is created. The data covers 1999-2002 and contains almost 190 annual observations. Three main cost categories are identified; infrastructure operation, maintenance and renewal. This data is used for estimations of cost functions in paper II, III and V. Econometric techniques are applied for this purpose, with several different model specifications. In paper II, the method of pooled ordinary least squares (POLS) is applied. In paper III, we turn to unobserved effects models to exploit data heterogeneity. Finally in paper V, a dynamic generalised method of moments estimator is used to explore a potential dynamic cost dependency. The main findings are that the POLS approach, which has been used in similar studies in Europe recently, is rejected in favour of fixed effects estimation for this data. Furthermore, we also reject the idea of regression analysis to capture marginal rail renewal costs. In paper IV, we suggest an analytical expression combined with survival analysis of rail ages to estimate marginal renewal costs. We derive elasticities with respect to output as well as marginal costs for the different cost categories, and find that the current charge for wear and tear in Sweden is well below these new estimates. This opens up for increased, marginal cost based rail infrastructure wear and tear charges, which would reduce the financial burden on Swedish tax-payers.

Place, publisher, year, edition, pages
Stockholm: KTH, 2007
Series
Trita-TEC-PHD, ISSN 1653-4468 ; 07:002
Keyword
Railways, Infrastructure, Marginal Costs, Maintenance, Renewal, Econometrics, Panel Data, Survival Analysis
National Category
Social Sciences
Identifiers
urn:nbn:se:kth:diva-4398 (URN)978-91-85539-18-5 (ISBN)
Public defence
2007-06-07, Sal D3, KTH, Lindstedtsvägen 5, Stockholm, 10:00
Opponent
Supervisors
Note
QC 20100622Available from: 2007-05-28 Created: 2007-05-28 Last updated: 2012-03-20Bibliographically approved

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CiteExportLink to record
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Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
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Language
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  • Other locale
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Output format
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