Transportation Economics

The transportation industry offers many interesting problems to the economists.
In fact, this is a domain where, for different reasons, competitive markets often do not provide an appropriate institutional framework. First, externalities abound: both congestion and environmental damages (not to mention fatalities) are sufficient to assert that marginal pricing does not yield to an efficient outcome. Moreover, as a result of increasing returns to scale, imperfect competition and even monopoly is often observed. Investment in infrastructures and the associate provision of public good problem provide another of set of issues where non-standard responses are required.

In seven year lecturing Transportation Economics at the PhD program of Toulouse School of Economics, I have had the opportunity to take a good overview of the field. This, together with some direct interactions with the industry provided me with several research questions that I started to tackle.

Air Transportation

In the air transportation industry, I pointed out the widespread absence of competition when looking at the industry on the basis of the origin-destination pairs. This yield me to propose a regulatory scheme to correct for the associated distortions - high markup and low frequency of services - in

  • "Regulation in the Air: Price-and-Frequency Caps"

Still concerning passenger services in the air transportation industry, I have been considering the

  • "Social Costs of Air-Traffic Delays"

in a joint-paper with Marc Ivaldi, Emile Quinet and Miguel Urdanoz, a PhD student at TSE. In this paper, we first characterize the socially optimal scheduling policy _ given no-regulation for pricing _ to consider the "costs of delays" being those that stream from the difference between the actual and the optimal policy. We then bring the model to the data provided to us by the French Civil Aviation authorities.

Railway Industry

In a context of deregulation, access to tracks is a critical issue. I have been considering this question (and its railway specificity) in

  • "Access pricing for mixed users"

The core aspect of this paper is that trains greatly differ in their weight, but also in their speed, which gives them in turn very different characteristics in terms of congestion. If the network must accommodate both freight and passenger services, this is a point to be accounted for. I exhibit the socially optimal pricing policy when there is a unique (network) infrastructure which is centrally managed.


With Marc Ivaldi and Jerome Pouyet we investigated competition on the tracks. This yield to the report:

  • "Entry in the Passenger Rail Industry"

Taxi Markets