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Modal choice between air and rail: a social efficiency benchmarking analysis that considers CO2 emissions

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Abstract

The problem of modal choice between rail and air arises as public awareness of carbon dioxide (CO2) emissions by the transportation sector rises. In this paper, we answer this question quantitatively by performing an efficiency benchmarking analysis that takes into account life-cycle CO2 emission due to transport service provision. The paper employs nonparametric efficiency estimation methods, namely a slacks-based inefficiency measure, as well as a more conventional directional distance function approach. We apply them to a panel data set for three major railway companies and the aviation sector in Japan for the period from 1999 to 2007. Results shows that, contrary to the common argument, air transport can still be more socially efficient than rail transport, even when the environmental load due to CO2 emission is incorporated. This is due to the aviation sector’s extremely low user cost, measured in terms of in-vehicle time. In other words, aviation is a necessary transportation mode for those with a very high willingness to pay for their time.

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Notes

  1. This positivity assumption for the data, along with joint-weak disposability, will lead to the implementation of the null-joint property. See Färe and Grosskopf (2003) and Färe et al. (2005) for an explanation.

  2. As long as SBI k  = D k , Bias k is zero even if SBI k is positive. Therefore, the use of slack values must be carefully analyzed in providing managerial suggestions.

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Acknowledgments

We are grateful to the All Japan Airport Terminals Association, Inc. for their research support. This research was financially supported by JR Central and a Grant-in-Aid for Scientific Research of the Ministry of Education, Culture, Sports, Science and Technology of Japan, Grant numbers 21730224, 22310092, the Japan Society for the Promotion of Science.

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Authors and Affiliations

  1. Faculty of Commerce, Fukuoka University, 8-19-1 Nanakuma, Jonan-Ku, Fukuoka, 814-0180, Japan

    Hirofumi Fukuyama

  2. National Graduate Institute for Policy Studies, 7-22-6 Roppongi, Minato-ku, Tokyo, 106-8677, Japan

    Yuichiro Yoshida

  3. Graduate School of Environmental Studies, Tohoku University, 6-6-20 Aramaki-Aza Aoba, Aoba-Ku, Sendai, 980-8579, Japan

    Shunsuke Managi

  4. Institute for Global Environmental Strategies, Hayama, Japan

    Shunsuke Managi

Authors
  1. Hirofumi Fukuyama
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  2. Yuichiro Yoshida
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  3. Shunsuke Managi
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Correspondence to Shunsuke Managi.

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Fukuyama, H., Yoshida, Y. & Managi, S. Modal choice between air and rail: a social efficiency benchmarking analysis that considers CO2 emissions. Environ Econ Policy Stud 13, 89–102 (2011). https://doi.org/10.1007/s10018-010-0006-7

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  • DOI: https://doi.org/10.1007/s10018-010-0006-7

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