Document Type

Honors Paper


Monika Lopez-Anuarbe

Publication Date



This study presents multiple approaches to examine the liberalization of rail transport in the European Union. A legislative review highlights the importance of unbundling infrastructure management and service operations in railway reforms. Furthermore, simultaneous and sequential decision making models specify how market opening minimizes the social deadweight loss and lead to more competitive pricing. Two production frontier models also analyze the effects of vertical disintegration and market opening on network outputs. Results suggest that both vertical unbundling and increasing competitiveness help improve productivity. Lastly, three case studies compare policy implementations across Europe. The United Kingdom, a front runner in railway liberalization, has used franchising to split up British Rail extensively. Germany’s integrated model, which keeps the infrastructure manager and the service operator under one umbrella company, has also reached the advanced level. Still, the incumbent Deutsche Bahn has maintained its dominance in long-distance routes. Meanwhile in France, reluctance to replace public ownership in railway companies poses a substantial obstacle for market opening reforms.



The views expressed in this paper are solely those of the author.