The Use of a Consumer Survey to Determine the Relevant Market – Case Study for public transport between Prague and Most
Issue:
1/2016
The aim of this paper is to define a relevant market in the passenger transportation industry for the route between Prague and Most. A rising number of bus companies operating on this particular market suggests competition pressures. On the basis of European Commission legislation and its common practice we apply a demand-side substitution analysis in the form of the so called SSNIP test. Data for the empirical analysis were collected by means of a customer survey, which captured reactions to a 10% increase in the price of purchased tickets. The survey outcomes were then used to calculate an own price elasticity of demand and to carry out a critical loss analysis in order to define the relevant market.
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Pages:
17-28
DOI:
10.1515/revecp-2016-0002
JEL:
R40
Keywords:
Transport Economics, SSNIP test, Critical loss analysis, Consumer survey
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