Does Monopoly Slow Down the Bullet Train? The Impact of Market Competition on the Price of High-Speed Rail Services

After Japan National Railways (JNR) was privatized into six regional railway corporations in 1987, two areas emerged with either a monopolistic or duopolistic industrial structure in high-speed rail (HSR) and the parallel conventional rail services. Using this variation in competitive pressure from conventional rail, we estimate the impact of market competition on the price, i.e., users’ time and monetary costs, of HSR travel provided by an oligopolistic service provider. We find that monopoly slowed down the Shinkansen “bullet train,” the world’s first HSR, by almost canceling out the technological speed improvements over the three decades of our sample period