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Terence tai-leung Chong, Angela Fung, Wing-ting Lee and Ka-lai Man
''Hedonic pricing models for metropolitan bus services''
( 2009, Vol. 29 No.2 )
Conventional studies on the pricing of bus services use the cost structure to explain bus fares. In this paper, a hedonic pricing model for bus services in Hong Kong is estimated. The contributions of cost and market factors are uncovered. It is found that the cost factors dominate the determination of bus fares. In contrast to our expectation, bus fares do not react to competition faced by bus companies. Moreover, except the three cross-harbour tunnels, the bus fare has no direct relationship with the tolls of other tunnels. Our model serves well as a reference tool for bus companies to set market-acceptable bus fares.
Keywords: Hedonic Pricing Model, Bus Fares, Kowloon Motor Bus.
JEL: R4 - Transportation Systems: General
C2 - Single Equation Models; Single Variables: General
Manuscript Received : Mar 13 2009 Manuscript Accepted : Apr 19 2009

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