Should i go by bus? The liberalization of the long-distance bus industry in France

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  • Should i go by bus? The liberalization of the long-distance bus industry in France
8 March 2017
By CEE-M

The opening up of the French long distance bus industry is one of the outcomes of the Macron Law, a 2015 bill designed to modernize the economy, foster growth, and deregulate many industries. Using a unique data set of several national and international bus routes, we show that the effects of the liberalization so far have been relatively mixed. Despite the entry of new competitors and increased daily services, the liberalization process has not, on average, reduced fares. While certain routes have not benefited from the expected procompetitive effects of liberalization, others are facing fiercer competition and dynamic pricing strategies and higher prices are being applied to the most used services. By exploiting the panel nature of our data, we show that the determinants of bus fares depend positively on the distance between origin and destination, and on school holiday periods. Fares are affected negatively by population wealth in the city of origin and positively by the size of the population in the city of origin. Lastly, a young population has a negative effect on fares since operators specifically target this category of customer.