Intermodal competition in the London-Paris passenger market: High-speet rail and air transport

This paper studies inter- and intramodal competition in the London-Paris passenger market. Using revealed preference data, we estimate nested and mixed multinomial logit models to examine passenger behaviour in the London-Paris market. We present a case study on the relocation of Eurostar services from Waterloo International to St Pancras International station. The results show that competition is present in this market. Demand is elastic, and passengers are heterogeneous in their valuation of fares and accessibility. Aviation and high-speed rail are homogenous in unobserved effects. The large market share of the Eurostar and the withdrawal of aviation alternatives indicate that competition will decline in the long-run

Choice of departure station by railway users

This paper applies a multinomial logit model to the choice of a departure railway station by Dutch railway passengers. This is a relevant theme since about 50% of Dutch railway passengers do not travel via the nearest railway station. The passengers’ choices for departure stations are aggregated at the four digit postal code area level. We applied three functional forms for the underlying systematic utility of a station, namely a linear effect of attributes, cross effect of distance and frequency of service, and a translog formulation on distance and frequency of train services. With 3,498 post code areas and 360 railway stations our analysis found consistent effect sizes for distance, frequency of service, intercity status of the station and the presence of park-and-ride facility on the choice of departure station. The effect of distance on the choice of a departure station declines smoothly. The effect of frequency of service is relatively small compared to the effect of distance. A frequency of service increase by a hundred trains per day is equivalent to being 600 m closer to the station. The Intercity status of the station plays the biggest role in the choice of departure station. It has an equivalent effect of a change in 2 km distance or about a frequency of service of 300 trains per day. In addition, the presence of park-and-ride facility in the station poses a sizable effect in the departure station choice. In most cases its effect reaches about 35% of the intercity status effect

The economics of airport congestion pricing

Conventional economic wisdom suggests that congestion pricing would be an appropriate response to cope with the growing congestion levels currently experienced at many airports. Several characteristics of aviation markets, however, may make naive congestion prices equal to the value of marginal travel delays a non-optimal response. This paper develops a model of airport pricing that captures a number of these features. The model in particular reflects that (1) airlines typically have market power and are engaged in oligopolistic competition at different sub-markets; (2) part of external travel delays that aircraft impose are internal to an operator and hence should not be accounted for in congestion tolls; and (3) different airports in an international network will typically not be regulated by the same authority. We present an analytical treatment for a simple two-node network and some numerical results to illustrate our findings. Some main conclusions are that second-best optimal tolls are typically lower than what would be suggested by congestion costs alone and may even be negative, and that cooperation between regulators need not be stable but that non-cooperation may lead to welfare losses also when compared to a no-tolling situation. © 2003 Elsevier Inc. All rights reserved

The effects of railway investments in a polycentric city

This paper analyses the effect of railway investment on land prices and land use in a polycentric city under various regulatory regimes of land markets. The introduction of a faster mode of transport (train), accessible in discrete locations leads to an extended city size. The stations of the “fast” mode attract dense residential settlements. As a result, the average residential and commercial land rents increase in both the competitive and segmented land market situations, as compared with the “slow” unimodal transport case. When rail investments only serve one particular centre, this leads to the growth of the advantaged centre at the expense of the other centre. Generally speaking, investment in the fast mode results in city growth and increase in rent receipts. However the effect of the investment for individual centres and their corresponding residential areas depends on the underlying land market assumptions and the level of investment. Distorted land markets lead to increases in commercial rents, but this is more than off-set by the decrease in residential land rent

Deterministic versus Random Utility: Implied Patterns of Vertical Product Differentiation in a Multi-Product Monopoly

In this article we study patterns of vertical product differentiation in a multi-product monopoly using a random utility model. Prior research shows that applying such a model in a multi-product setting implies symmetric patterns of product differentiation in which all product variants of a single firm have the same characteristics. Assuming that preferences differ across consumers and allowing for unobserved demand heterogeneity, we numerically show the existence of asymmetric, fully differentiated, patterns of vertical product differentiation in which the monopolist maximises profits by setting prices and qualities. In particular, we show that the patterns of vertical product differentiation depend crucially on the level of unobserved demand heterogeneity and the observed dispersion of willingness to pay for quality. Only if unobserved demand heterogeneity is small relative to the observed dispersion, asymmetric, fully differentiated, equilibriums exist. Furthermore, we find in our model that the level of unobserved heterogeneity and the dispersion of willingness to pay for quality do not affect the relative welfare efficiency of the monopolist

Nigerian scam e-mails and the charms of capital

So-called '419' or 'advance-fee' e-mail frauds have proved remarkably successful. Global losses to these scams are believed to run to billions of dollars. Although it can be assumed that the promise of personal gain which these e-mails hold out is part of what motivates victims, there is more than greed at issue here. How is it that the seemingly incredible offers given in these unsolicited messages can find an audience willing to treat them as credible? The essay offers a speculative thesis in answer to this question. Firstly, it is argued, these scams are adept at exploiting common presuppositions in British and American culture regarding Africa and the relationships that are assumed to exist between their nations and those in the global south. Secondly, part of the appeal of these e-mails lies in the fact that they appear to reveal the processes by which wealth is created and distributed in the global economy. They thus speak to their readers’ attempts to map or conceptualise the otherwise inscrutable processes of that economy. In the conclusion the essay looks at the contradictions in the official state response to this phenomena