Separability and Subadditivity in Australian Railways
22 Pages Posted: 8 Feb 2007
Date Written: January 2007
From the mid 1990s, Australian public railways were required to provide access to their track infrastructure to third parties seeking to operate trains, and some railways were split into their below-rail (track and signalling infrastructure) and above-rail (rolling stock and locomotives) components to facilitate access. Driving the reform was the notion that it would allow competition to develop in above-rail operations. This paper assesses the policy decision, using a unique dataset for Australian railways to ascertain their separability and the subadditivity of the above-rail task.
Keywords: Australian railways, subadditivity, separability, competition
JEL Classification: L11, L52, L92
Suggested Citation: Suggested Citation