Marginal cost of railway infrastructure wear and tear for freight and passenger trains in Sweden

Abstract

We analyse maintenance cost data for Swedish railway infrastructure in relation to traffic volumes and network characteristics, and separate the cost impact from passenger and freight trains. Lines with mixed passenger and freight traffic, and dedicated freight lines are analysed separately using both log-linear and Box-Cox regression models. We find that for mixed lines, the Box-Cox specification is preferred, while a log-linear model is chosen in the case of dedicated freight lines. The cost elasticity with respect to output is found to be higher for passenger trains than for freight trains in the case of mixed lines. The cost elasticity for freight trains on dedicated lines is higher than for freight trains on mixed lines. From a marginal cost pricing perspective, freight trains on mixed lines are currently over-charged, while passenger trains on mixed lines and freight trains on dedicated lines are under-charged.