Working Paper: CEPR ID: DP4319
Authors: Guido Friebel; Marc Ivaldi; Catherine Vibes
Abstract: Many European countries have sought to increase the efficiency of national railroad companies through a range of reforms: separating infrastructure and operations, creating independent regulatory institutions and providing access to the network to third parties. To estimate the effects of reforms on railroad efficiency, we investigate a new World Bank panel dataset that covers many EU countries over a period of 20 years. We compare the passenger traffic efficiency of national railroad companies by means of a production frontier model and evaluate the effects of reforms on efficiency. We find that reforms have efficiency-increasing effects but that the effect of reforms depends on sequencing: the introduction of multiple reforms in a package has at best neutral effects, but sequential reforms improve efficiency. Using the LISREL technique, we find that our results are robust against potential problems of endogeneity.
Keywords: network industries; panel data analysis; passenger and freight traffic; production frontier
JEL Codes: C23; D24; L51; L92
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Regulatory reforms (G18) | Railroad efficiency (L92) |
| One reform (P41) | Railroad efficiency (L92) |
| Multiple reforms (E69) | Railroad efficiency (L92) |
| Sequential reforms (P21) | Railroad efficiency (L92) |
| Freight traffic increase (L91) | Passenger traffic (L93) |