Do New Transit Lines Necessarily Improve User Cost in the Transit System?

24 Pages Posted: 4 Sep 2015

See all articles by Moez Kilani

Moez Kilani

University of Lille North of France

André de Palma

Ecole Normale Supérieure de Cachan

Stef Proost

KU Leuven - Department of Economics

Date Written: July 9, 2015

Abstract

The paper considers a public transport network without congestion where a fixed number of passengers want to go from A to B, from B to C and from A to C via B. We show under what conditions the addition of a new direct line AC, which avoids the use of the AB and BC links, would increase total user and operator costs. This paradox can be relevant for any network where the additional line AC is operated by an operator other than that of the AB and BC lines. The line (AC) can be either a new air transport link competing with an existing High Speed Rail (HSR) network or an HSR link or direct bus line that bypasses a local train network. Our result raises serious concerns with respect to the decentralized management of transit systems.

Keywords: Transport investment, public transport, externalities

JEL Classification: R42, R48, H42

Suggested Citation

Kilani, Moez and de Palma, André and Proost, Stef V., Do New Transit Lines Necessarily Improve User Cost in the Transit System? (July 9, 2015). Available at SSRN: https://ssrn.com/abstract=2655567 or http://dx.doi.org/10.2139/ssrn.2655567

Moez Kilani (Contact Author)

University of Lille North of France ( email )

Lille
France

André De Palma

Ecole Normale Supérieure de Cachan ( email )

61 Avenue du President Wilson
94235 Cachan
France
33688714344 (Phone)

Stef V. Proost

KU Leuven - Department of Economics ( email )

Leuven, B-3000
Belgium
016 32 66 35 (Phone)
016 32 67 96 (Fax)

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