Much of the previous literature has analyzed the cost
structure of different vertically integrated firms (see Ivaldi
and McCullough (2001) for a recent contribution). An
obvious implication of the new industrial structure is that all
costs related to infrastructure are accounted for separately
from train operation costs. In addition, the bulk of track
maintenance costs are booked on a disaggregate level, at
least in some countries. We are therefore able to analyze
costs at a more disaggregate level than previous studies.
The Swedish railway network (about 13,000 km), for
instance, is split up into some 260 track units. Not only
information about spending on maintenance but also about
traffic, length, number of switches, bridges and tunnels, the
quality of tracks, etc. is available at the track unit level. This
set of detailed micro-econometric information differs from
the aggregated time series data that has previously been
used to analyze the cost structure of the consolidated
railway industry. Similar data is also available from the
more recent restructuring in Finland. Therefore, we have
access to two unique databases for establishing possible
regularities in the pattern of railway infrastructure maintenance
costs.
Based on data over the years 1994–1996 and 1997–1999
from the Swedish and Finnish data sets, we have regressed
track maintenance costs against information about fixed
installations, track length and utilization. We find evidence
that variations in the number of trains using the infrastructure
have a small impact on maintenance activities. We also
calculate the marginal costs of track use and show that these
are low. Unavailable data (Sweden) and a short time series
(Finland) make it impossible to estimate the marginal costs
related to reinvestment.
The paper is organized in the following way. Section 2
reviews the structure of the Swedish and Finnish data sets,
providing a background to the empirical modeling described
in Section 3. Section 4 presents results from the estimation
and associated tests. The insights that the material provides
about railway maintenance are summarized in Section 5 and
Section 6 concludes.