The Economics of EU Railway Reform. Bruges European Economic Policy (BEEP) Briefing 8/2004

The EU began railway reform in earnest around the turn of the century. Two ‘railway packages’ have meanwhile been adopted amounting to a series of directives and a third package has been proposed. A range of complementary initiatives has been undertaken or is underway. This BEEP Briefing inspects the main economic aspects of EU rail reform. After highlighting the dramatic loss of market share of rail since the 1960s, the case for reform is argued to rest on three arguments: the need for greater competitiveness of rail, promoting the (market driven) diversion of road haulage to rail as a step towards sustainable mobility in Europe, and an end to the disproportional claims on public budgets of Member States. The core of the paper deals respectively with market failures in rail and in the internal market for rail services; the complex economic issues underlying vertical separation (unbundling) and pricing options; and the methods, potential and problems of introducing competition in rail freight and in passenger services. Market failures in the rail sector are several (natural monopoly, economies of density, safety and asymmetries of information), exacerbated by no less than 7 technical and legal barriers precluding the practical operation of an internal rail market. The EU choice to opt for vertical unbundling (with benefits similar in nature as in other network industries e.g. preventing opaque cross-subsidisation and greater cost revelation) risks the emergence of considerable coordination costs. The adoption of marginal cost pricing is problematic on economic grounds (drawbacks include arbitrary cost allocation rules in the presence of large economies of scope and relatively large common costs; a non-optimal incentive system, holding back the growth of freight services; possibly anti-competitive effects of two-part tariffs). Without further detailed harmonisation, it may also lead to many different systems in Member States, causing even greater distortions. Insofar as freight could develop into a competitive market, a combination of Ramsey pricing (given the incentive for service providers to keep market share) and price ceilings based on stand-alone costs might be superior in terms of competition, market growth and regulatory oversight. The incipient cooperative approach for path coordination and allocation is welcome but likely to be seriously insufficient. The arguments to introduce competition, notably in freight, are valuable and many e.g. optimal cross-border services, quality differentiation as well as general quality improvement, larger scale for cost recovery and a decrease of rent seeking. Nevertheless, it is not correct to argue for the introduction of competition in rail tout court. It depends on the size of the market and on removing a host of barriers; it requires careful PSO definition and costing; also, coordination failures ought to be pre-empted. On the other hand, reform and competition cannot and should not be assessed in a static perspective. Conduct and cost structures will change with reform. Infrastructure and investment in technology are known to generate enormous potential for cost savings, especially when coupled with the EU interoperability programme. All this dynamism may well help to induce entry and further enlarge the (net) welfare gains from EU railway reform. The paper ends with a few pointers for the way forward in EU rail reform.

Identity construction through phonetic crossing among young Capetonian gang members

Uncountable gangs operate in post-Apartheid South Africa, particularly in greater Cape Town, competing over turf and controlling the drug trade. Consequently, gang violence is rife in Western Cape and especially widespread in urban areas. In this paper young Capetonians’ narratives of gang violence are analyzed. In the narratives of attacks on Black or White South Africans by Coloured gang members, the Coloured narrators make use of their victims’ varieties of English, more precisely, of phonetic features. Hence, the aggressors do language crossing towards their targets when narrating their feats. Rampton (1995a:485) considers language crossing a ‘code alternation by people who are not accepted members of the group associated with the second language that they are using (code switching into varieties that are not generally thought to belong to them)’. This switching involves a transgression of social or ethnic boundaries that allows the young gangsters to construct, negotiate, uphold and manage their social identities, as language still functions as an utterly important identity marker in post-Apartheid South Africa.

Putting Up a Big Front: Car Design and Size Affect Road-Crossing Behaviour

Previous research suggests that people tend to see faces in car fronts and that they attribute personality characteristics to car faces. In the present study we investigated whether car design influences pedestrian road-crossing behaviour. An immersive virtual reality environment with a zebra crossing scenario was used to determine a) whether the minimum accepted distance for crossing the street is larger for cars with a dominant appearance than for cars with a friendly appearance and b) whether the speed of dominant-looking cars is overestimated as compared to friendly-looking cars. Participants completed both tasks while either standing on the pavement or on the centre island. We found that people started to cross the road later in front of friendly-looking low-power cars compared to dominant-looking high-power cars, but only if the cars were relatively large in size. For small cars we found no effect of power. The speed of smaller cars was estimated to be higher compared to large cars (size-speed bias). Furthermore, there was an effect of starting position: From the centre island, participants entered the road significantly later (i. e. closer to the approaching car) and left the road later than when starting from the pavement. Similarly, the speed of the cars was estimated significantly lower when standing on the centre island compared to the pavement. To our knowledge, this is the first study to show that car fronts elicit responses on a behavioural level.

The Railway review

Mode of access: Internet.