Opening the tracks: The impact of rail liberalization on ridership growth in the Czech Republic

The Czech Republic has carried out dedicated rail liberalization. Two major lines, Prague–Ostrava and Prague–Brno, were opened for on-track competition and entered by private operators. These entries led to fare declines, frequency increases, and quality improvements. Ridership increased significantly, but it has not been clear what part of the ridership growth has been caused by competition and what part by other factors. We used data about Czech rail ridership that consists of 12 long-distance connections from Prague to regional centres. Four were routes with competition and eight were routes operated solely by the incumbent. This design enables differentiation of what part of the ridership increases was caused by competition and what part by other factors. The main result is that after controlling for economic growth and travel-time improvements, ridership on lines with competition grew by 5 % p.a. more than it did on lines without competition.