The paper examines some of the technical issues in inferring consumers' surplus levels for new services from information about existing substitute services. The demand for the new service can be subdivided into traffic transferring from each substitute service and generated traffic. For transferring traffic, it is shown that the total benefits are simply: the saving in the costs for the existing transport alternative, plus the additional costs of the new alternative, plus or minus the value of service quality differences. The relevant value to use for non-price attributes, whether for transferred or generated traffic, is not the average value for the whole population of freight or passengers, but the average value for traffic that actually uses the new service. If the new service is cheaper and inferior to the existing service, the relevant value of non-price attributes that for traffic at the low end of the distribution of values, and conversely where new service is a dearer, superior one. Inferences about values of non-price attributes can be drawn from the prices of the existing and new services. (Author/publisher) For the covering entry of this conference, please see ITRD abstract no. E209537. This paper may also be accessed by Internet users at: http://www.btre.gov.au/docs/atrf_02/program.html
Abstract