Ph.D. thesis: Eva Valeri 2013 UNIVERSITÀ’ DEGLI STUDI DI TRIESTE XXIV° CICLO DEL DOTTORATO DI RICERCA IN SCIENZE INTEGRATE DELLA SOSTENIBILITÀ TERRITORIALE Air and rail transport in the Rome-Milan corridor: competition policy implications based on a discrete choice analysis Settore scientifico-disciplinare: SECS-P/06 ECONOMIA APPLICATA Ph.D. STUDENT EVA VALERI Ph.D. PROGRAM DIRECTOR PROF. ROMEO DANIELIS THESIS SUPERVISORS PROF. EDOARDO MARCUCCI PROF. ROMEO DANIELIS ANNO ACCADEMICO 2011 / 2012 1 Ph.D. thesis: Eva Valeri 2013 Table of Contents LIST OF FIGURES ..................................................................................................................... 5 LIST OF TABLES....................................................................................................................... 7 ACKNOWLEDGEMENTS........................................................................................................12 1. INTRODUCTION ...........................................................................................................13 1.1. BACKGROUND ....................................................................................................................................................14 1.2. HYPOTHESIS.......................................................................................................................................................15 1.3. RESEARCH SCOPE AND MOTIVATION .........................................................................................................15 1.4. AIM AND OBJECTIVES ......................................................................................................................................16 1.5. ORGANIZATION OF THE THESIS....................................................................................................................17 2. THE LIBERALIZATION PROCESS IN AIR AND RAIL TRANSPORT .......................19 2.1. INTRODUCTION .................................................................................................................................................20 2.2. AIR AND RAIL TRANSPORT LIBERALIZATION ............................................................................................20 2.2.1. The air transport market .............................................................................................................. 20 2.2.1.1. In Europe..................................................................................................................................................20 2.2.1.2. In Italy.......................................................................................................................................................30 2.2.2. The rail transport market............................................................................................................. 35 2.2.2.1. In Europe..................................................................................................................................................35 2.2.2.2. In Italy.......................................................................................................................................................41 2.3. CONCLUSION ......................................................................................................................................................44 3. COMPETITION POLICY AND REGULATION IN AIR AND RAIL TRANSPORT......45 3.1 INTRODUCTION ........................................................................................................................................................46 3.2 ANALYSIS OF THE ITALIAN ANTITRUST AUTHORITY ACTIVITIES IN TRANSPORT SECTORS ........46 3.2.1. Fact-finding activity.......................................................................................................................... 46 3.2.2. Advocacy activity.............................................................................................................................. 48 3.2.3. Investigations activity..................................................................................................................... 49 3.2.3.1. Abuse of dominant position....................................................................................................................50 3.2.3.2. Mergers ....................................................................................................................................................51 3.2.3.3. Agreements restricting competition ......................................................................................................52 3.3. ANALYSIS OF THE ANTITRUST INTERVENTIONS ON INTERMODAL COMPETITION..........................53 3.3.1. The relevant market: definition and methods................................................................... 53 3.3.2. The European Commission Competition’s approach..................................................... 56 3.2.3.4. Definition of the relevant market...........................................................................................................56 3.2.3.5. Review of the EC cases ............................................................................................................................58 3.4. CONCLUSION ......................................................................................................................................................65 4. MODELLING AIR AND RAIL TRANSPORT COMPETITION ....................................66 4.1. INTRODUCTION .................................................................................................................................................67 4.2. AIR AND HSR ADVANTAGES..........................................................................................................................67 4.3. COSTS FUNCTION ..............................................................................................................................................67 4.4. PROFIT FUNCTION ............................................................................................................................................69 2 Ph.D. thesis: Eva Valeri 2013 4.5. MARKET SHARE MODEL ..................................................................................................................................70 4.6. CONCLUSION ......................................................................................................................................................71 5. DISCRETE CHOICE ANALYSIS OF AIR-RAIL TRANSPORT COMPETITION: A LITERATURE REVIEW ..........................................................................................................72 5.1. INTRODUCTION .................................................................................................................................................73 5.2. RESEARCH ASPECTS REVIEWED....................................................................................................................75 5.2.1. Type of data collected ..................................................................................................................... 75 5.2.2. Geographical area of study .......................................................................................................... 76 5.2.3. Modes covered ..................................................................................................................................... 76 5.2.4. Attributes covered............................................................................................................................. 76 5.2.5. Place and method of interview administration ................................................................ 77 5.2.6. Number of interviews administered ....................................................................................... 77 5.2.7. Econometric model used ............................................................................................................... 77 5.3. CONCLUSION ......................................................................................................................................................78 6. DISCRETE CHOICE ANALYSIS OF AIR-RAIL COMPETITION: MODELS AND DATA COLLECTION ..........................................................................................................................79 6.1. INTRODUCTION .................................................................................................................................................80 6.2. STATED AND REVEALED PREFERENCE DATA ...........................................................................................80 6.3. COMBINING STATED AND REVEALED PREFERENCE DATA SOURCES .................................................82 6.4. THEORY OF DISCRETE CHOICE MODELS......................................................................................................82 6.4.1. Multinomial Logit model............................................................................................................... 84 6.4.2. Nested Logit model ........................................................................................................................... 85 6.4.3. Mixed Logit model............................................................................................................................. 86 6.4.4. The Latent Class model .................................................................................................................. 89 6.5. THE THEORY