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Evaluating the long term impacts of transport policy: an initial assessment of bus deregulation

Evaluating the long term impacts of transport policy: an initial assessment of bus deregulation
Evaluating the long term impacts of transport policy: an initial assessment of bus deregulation
Local buses in Britain, outside London, were ‘deregulated’ as a result of the 1985 Transport Act, with most of the organisational changes implemented in 1986 but many of the ownership changes occurring over a longer period. By contrast, in London, the 1984 London Regional Transport Act introduced a system of comprehensive tendering – but it took 10 years for the organisational and ownership changes to be fully implemented. This paper examines the long term impacts of these changes. A key issue when examining long term changes is that of the counterfactual – what would have happened if the changes had not occurred? An econometric model of the demand for local bus services in Britain is outlined and used in conjunction with extrapolative methods for key variables such as fares and bus kms to determine demand-side counterfactuals. Some analyses of subsidy and of costs will also be outlined. This will then permit the examination of welfare change by estimating changes in consumer and producer surpluses, updating earlier studies. It is found that outside London, bus demand declined strongly, at least up to the year 2000 and some of this reduction can be ascribed to deregulation. By contrast in London, demand has generally been increasing. However, in both areas operating costs also declined strongly, again up to 2000, but since then there have been strong increases in costs and subsidy. Our initial finding is that there are net welfare increases both outside and inside London, but with welfare increases per capita being five times greater in London than elsewhere. However, sensitivity analysis shows that our results are sensitive to the specification of the modelling system and assumptions made concerning the counterfactual, particularly for the results for London.

local bus, deregulation, welfare analysis
0739-8859
208-214
Preston, John
ef81c42e-c896-4768-92d1-052662037f0b
Almutairi, Talal
9d5b3419-c49c-4e33-b629-e7aca61a353b
Preston, John
ef81c42e-c896-4768-92d1-052662037f0b
Almutairi, Talal
9d5b3419-c49c-4e33-b629-e7aca61a353b

Preston, John and Almutairi, Talal (2013) Evaluating the long term impacts of transport policy: an initial assessment of bus deregulation. Research in Transportation Economics, 39 (1), 208-214. (doi:10.1016/j.retrec.2012.06.015).

Record type: Article

Abstract

Local buses in Britain, outside London, were ‘deregulated’ as a result of the 1985 Transport Act, with most of the organisational changes implemented in 1986 but many of the ownership changes occurring over a longer period. By contrast, in London, the 1984 London Regional Transport Act introduced a system of comprehensive tendering – but it took 10 years for the organisational and ownership changes to be fully implemented. This paper examines the long term impacts of these changes. A key issue when examining long term changes is that of the counterfactual – what would have happened if the changes had not occurred? An econometric model of the demand for local bus services in Britain is outlined and used in conjunction with extrapolative methods for key variables such as fares and bus kms to determine demand-side counterfactuals. Some analyses of subsidy and of costs will also be outlined. This will then permit the examination of welfare change by estimating changes in consumer and producer surpluses, updating earlier studies. It is found that outside London, bus demand declined strongly, at least up to the year 2000 and some of this reduction can be ascribed to deregulation. By contrast in London, demand has generally been increasing. However, in both areas operating costs also declined strongly, again up to 2000, but since then there have been strong increases in costs and subsidy. Our initial finding is that there are net welfare increases both outside and inside London, but with welfare increases per capita being five times greater in London than elsewhere. However, sensitivity analysis shows that our results are sensitive to the specification of the modelling system and assumptions made concerning the counterfactual, particularly for the results for London.

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More information

Published date: March 2013
Keywords: local bus, deregulation, welfare analysis
Organisations: Transportation Group

Identifiers

Local EPrints ID: 350338
URI: http://eprints.soton.ac.uk/id/eprint/350338
ISSN: 0739-8859
PURE UUID: a9155835-2362-4831-b832-4c74a815da83
ORCID for John Preston: ORCID iD orcid.org/0000-0002-6866-049X

Catalogue record

Date deposited: 25 Mar 2013 13:54
Last modified: 15 Mar 2024 03:25

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Contributors

Author: John Preston ORCID iD
Author: Talal Almutairi

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