Estimation of the Effect of a New Competitor’s Entry on Railways on Ticket Availability for Customers Using Survival Models

This study investigates how direct competition affects ticket availability in high-speed rail market, specifically examining how the entry of new competitors influences the timing and accessibility of low-cost tickets. Unlike previous researches, which focus on pricing, this study emphasizes discounted ticket availability in time as a key factor in passenger satisfaction, particularly for cost-sensitive travellers. Using a dataset of ticket prices across major city pairs in Italy, the analysis applies survival models, including ones based on non-parametric methods and Weibull regressions, to assess when fare levels become available or unavailable. The hypothesis is that one effect of competition is that discounted prices remain available for longer with respect to a monopolistic situation where the operator can manage more freely the capacity allocation. Additionally, the study uses the difference-in-difference approach to evaluate the impact of competition by comparing treated and untreated routes before and after competitor entry. The focus is on non-flexible, low-cost fare types, which are the ones that expire sooner, but also those that are most positively affected by competition. To ensure robustness, two-time intervals were included, and placebo tests and model validation checks were conducted. By shifting the focus from price reductions to ticket availability, the study provides new insights into how competition shapes consumer access to services. The use of survival analysis in this context allows for a unique estimation of both the timing of ticket availability and the impact of new market entrants. The findings confirm expectations and reveal that competition significantly increases the availability of affordable tickets, doubling their availability within three months of competitor entry. The application is significant also from a methodological viewpoint, as survival methods have never been applied before in the field of transport pricing.