The role of the passenger train in the United States: A cost comparison of the common carriers

Abstract

The objective of this article is to establish whether the train has a role to play in the market for intercity passenger travel in the United States. To accomplish this objective, we compare the common carriers on the basis of thier cost effectiveness in moving a given flow of passengers between two points a specified distance apart. The comparisons are based on cost models which highlight the technological differences between the modes and eliminate distortions caused by public policy choices. By varying the size of the passenger flow and trip distance, we develop a notion of each common carrier's ideal operating environment. We find that the cost of the right-of-way is the major factor limiting the range of travel situations in which the train is cost competitive with the other common carriers. More specifically, our results indicate that Amtrak's service in the Northeast Corridor should be continued in the short run. In the long run, the possibility of upgrading Amtrak's service in the Northeast Corridor to high-speed service should be investigated. Outside the Northeast Corridor, we find that high-speed train service should be able to cover its operating costs but not its capital costs.