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| Author: | Winston, C. Yan, J. |
| Title: | Can privatization of U.S. highways improve motorists' welfare? |
| Journal: | Journal of Public Economics
2011 : AUG, VOL 95:7-8, p. 993-1005 |
| Index terms: | privatization preferences roads USA |
| Language: | eng |
| Abstract: | We evaluate the welfare impact of highway privatization accounting for government behavior in setting the sale price, companies' strategic behavior in toll setting, and motorists' heterogeneous preferences for speedy and reliable travel. We find motorists able to benefit from privatization by negotiating tolls with certain private providers increasing consumer surplus. Interestingly, we find that by obtaining tolls and service that fit in with their varying preferences, motorists may achieve more by negotiating with a monopolist than with duopoly providers or under public–private competition. Toll regulation may be harmful because it likely treats motorists as homogeneous. |
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