Deregulation and the Determinants of Network Access: Evidence from the German Interurban Bus Industry

Abstract

We investigate the characteristics of cities gaining access to the German interurban bus network in the first two years following the deregulation of the industry in January 2013. Applying both parametric and semi-parametric survival models, we find strong evidence that the probability of a city to be added to a provider’s network not only increases with the mere size of its population but also with further demographic characteristics such as average income or the share of young and old inhabitants. Additionally, while an increasing importance of tourism has a further positive effect, a rising automobile density is imposing a significantly negative impact on the probability of a city to gain access to the network.

Keywords: R12, R38, R41, L92, C41

JEL Classification: Urban areas, transport, interurban bus, deregulation, entry, survival analysis