Scandinavian Working Papers in Economics

Working papers in Transport Economics,
CTS - Centre for Transport Studies Stockholm (KTH and VTI)

No 2016:23: Dynamics in rail infrastructure provision: maintenance and renewal costs in Sweden

Kristofer Odolinski () and Phillip Wheat
Additional contact information
Kristofer Odolinski: VTI, Postal: Centrum för Transportstudier (CTS), Teknikringen 10, 100 44 Stockholm, Sweden
Phillip Wheat: Institute for Transport Studies (ITS), University of Leeds, Postal: Centrum för Transportstudier (CTS), Teknikringen 10, 100 44 Stockholm, Sweden

Abstract: In this paper we analyze the dynamics between rail infrastructure renewals and maintenance in Sweden, using a panel vector autoregressive model. The model estimation also comprises intertemporal effects for each of these activities. We find that past values of maintenance gives a better prediction of current renewal costs compared to only using past values of renewals as a predictor. Moreover, the results indicate intertemporal effects for both renewals and maintenance, where an increase in costs during a year predicts an increase in costs in the following year. The dynamic model also allows us to estimate equilibrium cost elasticities with respect to ton density, which are significantly larger than its static counterparts. Overall, this work highlights that dynamics in rail infrastructure costs are important to consider when setting track access charges with respect to the wear and tear caused by traffic.

Keywords: Maintenance; Renewals; Vector autoregression; Rail infrastructure

JEL-codes: L92; R48

31 pages, November 25, 2016

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CTS2016-23.pdf PDF-file 

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