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Pricing and Investment in Railway Freight Services

Pricing and Investment in Railway Freight Services

British Rail, now largely freed from government regulation, bases its freight prices on the prices of its competitors and on quality of service. Costs are used to tell whether, and for how long, br can profitably accept traffic at market prices. Assets will be replaced only to the capacity which is justified by traffics which can bear their long-run marginal costs. In the Common Market countries road and rail are both subject to detailed government regulation of charges.

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Optimal Public transport Price and Service Frequency

Because values of time and passenger behaviour depend on the level of frequency it is found that: (1) in urban public transport there may be one low-deficit local optimum and one high-deficit local optimum, one of which is global; (2) contrary to what might be expected, optimal financial deficit per passenger is typically larger for high frequency services than for low-frequency services; (3) the optimal off-peak may exceed the optimal peak price.

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