Working Papers, Swedish National Road & Transport Research Institute (VTI)
No 2006:6:
Marginal railway infrastructure cost estimates in the presence of unobserved effects
Mats Andersson ()
Abstract: New railway legislation in Sweden has increased the need
for transparent access charges on the Swedish railway network. The purpose
of this paper is to estimate cost functions for infrastructure operation,
maintenance and renewal in the Swedish national railway network, using
unobserved effects models. The estimated cost functions are used to
calculate the marginal cost for railway infrastructure wear and tear and
give the Swedish National Rail Administration (Banverket) support in
designing a marginal cost based pricing scheme in line with Swedish
transport policy. A panel of 185 track sections is observed during
1999-2002. Collected data covers infrastructure, traffic and cost data.
Despite having a rich set of information, unobserved effects are assumed to
exist, which will bias estimates by ordinary least squares (OLS) due to
omitted variables. We therefore use random effects specifications to
estimate our models. We find evidence of unobserved effects at a track
district level for infrastructure operation, maintenance and renewal costs.
We estimate the marginal infrastructure operation cost to SEK 0.50 per
train kilometre and the marginal maintenance cost to SEK 0.0029 per gross
tonne kilometre. Combining maintenance and renewal cost increases the
estimate to SEK 0.0065 per gross tonne kilometre. For all models,
elasticities and marginal cost estimates are in line with previous work
using pooled ordinary least squares (Andersson, In press).
Keywords: Railway; Infrastructure operation; Maintenance; Renewal; Marginal costs; Unobserved effects models; (follow links to similar papers)
JEL-Codes: C23; H54; L92; R48; (follow links to similar papers)
31 pages, August 25, 2006
WP 2007:11 is a substantially revised version of this paper.
Download Statistics
Questions (including download problems) about the papers in this series should be directed to Jan-Eric Swärdh ()
Report other problems with accessing this service to Sune Karlsson ()
or Helena Lundin ().
Programing by
Design by Joachim Ekebom
