Michael E. Beesley

Deregulating the bus industry in Britain — (C) a response

The paper evaluates arguments put for and against government policy concerning legislation on the deregulation of the UK bus industry, and is critical of arguments against such policy. The current policy dictates that subsidy to the bus industry must be reduced substantially for which there is scope through cost reductions. It is considered that such reductions can only be quickly achieved through the competition offered by the policy of deregulation. (TRRL)

Bidding for tendered bus routes in London

Individual bids made for cost contracts in London Regional Transport bus routes between 1985 and 1988 are analysed, for three purposes: to test hypotheses about bidding under competition; to examine bid tactics when a dominant incumbent, London Buses Ltd., was exposed to private bids; and to devise cost estimates for different types of bus operations. With individual route bids, while some expected features of bidding in competitive equilibrium are found, the bids more plausibly reflect the differential rents to factor supplies in disequilibrium. London Buses Ltd successfully deployed superior ability to combine bids for groups of routes when tendered together, discouraging the tenderer from pursuing this tactic. Costs for different types of operation, derived from the statistical analysis of individual routes, are confirmed by inferences from grouped bids. We are grateful for the assistance and advice provided by several officers of London Regional Transport, particularly Mr. Nick Newton. We have benefit...

DEREGULATING THE BUS INDUSTRY IN BRITAIN: A REPLY

In this paper, which closes this discussion of the merits of the case for bus industry deregulation in the United Kingdom, the authors note points of agreement and disagreement with the arguments put forward by Gwilliam, Nash & Mackie against deregulation in the form proposed. While agreeing that costs per passenger mile must be reduced by pressure on labour costs and by increasing productivity, the authors reaffirm their view that only deregulation can bring about sufficient cost saving quickly enough through competition for routes. See also IRRD abstracts nos. 282640, 282641 & 284902. (TRRL)

Bus deregulation: lessons from the U.K.

The simultaneous changes of policy in 1985, deregulation, subsidy change and reduction, and privatisation make it hazardous to interpret changes in the UK local bus industry over 1985–1987, the period for which data are available. Limited comparison between geographical areas point to subsidy reduction as a major effect. However, largely because costs have also fallen, subsidy remains an important influence. Proceeding from a review of the economics of entry, the paper argues that present subsidy and procedures are a major impediment to entry, reinforced by regulatory inhibitions to vertical disintegration and site acquisition. The importance of other obstacles to freer bus markets was largely unforeseen when the principal deregulation move of removing quantity restrictions was made.

Private tollroads in urban areas

Governments of all persuasions are increasingly seeking the participation of the private sector in the supply of transport facilities and services. Private sector participation in the financing, construction, operation and maintenance of infrastructure is considered a serious option in a number of countries in the search for ways of providing much needed investment which would otherwise be deferred. This paper considers some economic and financial problems in the private sector provision of major road infrastructure within urban areas. The main issues are attaching prices (i.e. tolls) to the provision of the service, the value of government rights which are being given up either permanently or temporarily, and the identification required by the promoters of the cost of capital which is essential information in establishing the risk. Broader environmental and equity issues are not addressed. If the approach to establishing a private presence in a previously public supply context is handled properly from the outset, the benefits can be significant. Contrarily however, the prospects could be quite undesirable if badly managed, despite the presence of an extended public purse.

Identification of segmentation criteria for the improvement of population forecasts

It is often stated that the single most important influence on the quality of forecasts of behaviour is the set of predetermined exogenous variables (typically sociodemographic) that categorise the population. These variables are used to carry the sampled population into the future as a representation of the composition of future populations. Such variables or segmentation criteria are typically dictated by the limited set of descriptors projected by specialised forecasting agencies. Although the wisdom of their efforts is respected, from time to time it seems worthwhile to reappraise the set of exogenous variables which are subject to intense forecasting to see if there may be a case for considering additional variables (and even ‘resting’ the current set). It is argued that a desired segmentation set should be linked to preference stability, and that a suitable procedure for establishing such a link is via preference data derived from a controlled experimental design. From the empirical study it is illustrated how preference data can be combined with socioeconomic data to seek out the role of the ‘current’ set and the ‘new’ set of socioeconomic variables in a particular forecasting context. Since the selection of variables must be application specific, the main emphasis of this paper is on the methodology. The reported empirical findings are of illustrative use only.

Competition and ownership in land passenger transport: the fifth international conference

The aim of this introductory paper is provide the background to the Fifth International Conference on Competition and Ownership in Land Passenger Transport, which was held in Leeds, UK, in May 1997 and was attended by around 120 delegates from 20 countries. This is done by reviewing past conferences in the series and summarizing the structure of the Leeds conference and the key emerging themes. Further details are given by the five workshop reports that accompany this introduction.

The consistency of choice using experimental design

Abstract Conjoint designs provide an appealing context for investigating the consistency of consumer choice. This short article demonstrates that in principle experimental designs can be an effective mechanism for studying the consistency of consumer choice, provided one includes some pairs of attribute combinations which are dominant, such that one is worse or better off on every dimension. Using a preference design from a study on attendance at an international exposition in Australia we identify dominance in a subset of all possible pairs, and use this in two test of choice consistency to identify the extent of illogicality in choice. Discrete choice analysis is used to see if inconsistency is linked to population subgroups. The evidence can be used to point to subgroups who may have difficulty in comprehending controlled experimental instruments, and/or are not rational in the sense defined by our models of behaviour, and who may require special consideration in prediction of choice.