Deregulation and the determinants of network access: evidence from the German interurban bus industry

ABSTRACT

We investigate the characteristics of cities gaining access to the German interurban bus network in the first two years following the deregulation of the industry in January 2013. Applying both parametric and semi-parametric survival models, we find strong evidence that the probability of a city to be added to a provider’s network increases not only with the mere size of its population but also with further demographic characteristics such as average income or the share of young and old inhabitants. Additionally, while an increasing importance of tourism has a further positive effect, a rising automobile density is imposing a significantly negative impact on the probability of a city to gain access to the network.

KEYWORDS:

• Urban areas
• transport
• interurban bus
• deregulation
• entry
• survival analysis

JEL CLASSIFICATION:

• R12
• R38
• R41
• L92
• C41

Acknowledegments

We are indebted to Rüdiger Knobel (Simplex Mobility) for providing us with his entry data sets, to an anonymous reviewer and Sven Heim for valuable comments on earlier versions of the article and to Benedikt Kauf and Victoria Urmetzer for excellent research assistance. The usual disclaimer applies.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Interestingly, as indicated by the respective coefficients, the share of under 24 years old is twice as important for gaining access to the network than the share of over 65 years old.