Rail Externalities: Assessing the Social Cost of Rail Congestion

Abstract

In contrast to the hundreds of scientific papers published on road congestion, very few academic papers have been written on congestion in the rail industry. Most papers focus on scarcity of train paths or, following Petersen (1974), in the relationship between scarcity and speed. However, we could suppose that in rail sector, high traffic density during peak-hours generates an additional delay on others users, so an external cost. In this context, track access charges may reflect the correct marginal social cost of adding a train. The aim of this paper is to use French infrastructure manager data to assess the relationship between traffic and delay. According to the line and its features (allowed speed, number of tracks, signalling…), the econometrical analysis shows a positive econometric relationship between traffic and unreliability rate: an additional train on the line increases the probability of being late for it and for third trains. These results allow computing a marginal cost of congestion, which can be used for pricing and cost benefit analysis of capacity investments. This study may support the implementation of a congestion charge in the French rail network.