An Investigation of the Willingness to Pay to Reduce Rail Overcrowding

Abstract

Overcrowding is becoming an increasingly important issue for the UK rail industry. The demand for passenger rail travel is at a 50 year high and is growing at a rate of 4.5 % per annum. In many cases, the network is at, or close to, capacity and there is limited scope to price-off demand as principal commuter fares are regulated. The UK Department for Transport (DfT) is responsible for both rail industry strategy and for the specification of franchises; strategies for managing demand and capacity are integral to both of these. To be able to demonstrate value for money, it is essential for the DfT to have robust estimates of both the economic value of reducing overcrowding and the demand effects of it. Evidence on the valuation of overcrowding contained within the rail sector’s Passenger Demand Forecasting Handbook (PDFH) has a number of limitations. Existing values only extend to a certain level of crowding which is already exceeded in a number of situations, and without mitigating action, will be exceeded in many others in the future. In addition, the level of disaggregation, particularly in terms of geographical coverage, may not be sufficient to accurately reflect both current and future situations. The DfT has therefore commissioned this study to obtain robust estimates of the valuation of overcrowding across the range of contexts in which it may occur, so that it can take appropriate decisions on policies to