How does structural reform affect cost and demand in railway systems

The main purpose of this study is to investigate how structural separation policies (especially vertical separation and the holding company) affect the costs and demand in the rail industry - and try to explore the mechanisms through which these impacts occur. On the cost impact investigation, we contribute to the past literature by focusing on investment coordination / misalignment costs and how these might vary across different railway structures and by providing a substantially more up -to-date view of the impact of rail reforms than in previous cost function studies. On the demand side, we introduced several intermediate factors such a s rail price, safety, and infrastructure investment to investigate how they interact with the structural reform to affect passenger rail mode share. We find that higher infrastructure investment has a greater cost-reducing effect in the vertically separated regime than in more integrated regimes. On the other hand, passenger rail mode share can be affected by rail price and safety in a vertically separated environment and can be affected by infrastructure investment in the holding company regime