Contestability in bus markets – evidence from the British de-regulated market.

Cowie, Jonathan (2012) Contestability in bus markets – evidence from the British de-regulated market. Applied Economics, 44 (36). 4777 - 4785. ISSN 0003-6846

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Following the 1985 Transport Act in Great Britain, reforms in the provision of bus services continue across Europe and other parts of the world to this day. The British experience, however, remains a key point of study in informing these continuing developments. This article looks at the issue of contestability in bus markets, and tests for the existence of the contestable market in Britain through an examination of fare levels, profit margins and technical efficiencies in 90 identifiable bus markets. The main conclusion is that there is evidence of the contestable market in Britain, however it can hardly be described as widespread, only found to be present in 15 of the 90 markets identified in the sample. The real issue however, particularly with regard to continuing reforms elsewhere in Europe, is the ability of regulatory authorities to maintain competitive and contestable (free) markets and the research suggests that in the face of market forces this is simply not possible. The only conclusion therefore is that contestability in the free market is not sustainable, and thus can only be introduced directly through franchising.

Item Type: Article
Print ISSN: 0003-6846
Uncontrolled Keywords: bus de-regulation; contestable markets; pricing and profits; efficiency; regulation;
University Divisions/Research Centres: Edinburgh Napier University, Transport Research Institute
Dewey Decimal Subjects: 300 Social sciences > 380 Commerce, communications & transportation > 388 Transportation; ground transportation
Library of Congress Subjects: H Social Sciences > HE Transportation and Communications
Item ID: 5121
Depositing User: Computing Research
Date Deposited: 13 Apr 2012 10:45
Last Modified: 21 Nov 2012 16:11

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