Performance-based regulation of train service delays: Hong Kong

Chi Keung Woo, Kang Hua Cao*, Tsz Leung Yip, Sin Yin Chow, Cho Leung Chu, Jay Zarnikau, Chloe Mow

*Corresponding author for this work

    Research output: Contribution to journalJournal articlepeer-review

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    This paper studies performance-based regulation of train service delays in Hong Kong. Motivated by the criticism that the Mass Transit Railway (MTR) offers fare rebates deemed too small for long service delays, our logit analysis of a stated choice experiment’s data collected from 1,559 MTR users in Q4:2020 yields the following findings: (1) the disaggregate willingness to pay (WTP) estimates that ignore passenger attributes are HK$21 to HK$37 for a 15- to 60-minute train service delay announced to occur in a 1-hour period; (2) increasing the period by one hour raises these estimates by ~HK$16; (3) accounting for passenger attributes magnifies these estimates by ~18%; and (4) the aggregate WTP estimates are 1.3 to 4.9 times MTR’s existing rebates for rush-hour delays and 0.5 to 1.9 times for non-rush-hour delays. Hence, aligning MTR’s rebates with the aggregate WTP estimates likely incentivizes MTR to reduce long service delays.

    Original languageEnglish
    Pages (from-to)1847-1854
    Number of pages8
    JournalApplied Economics Letters
    Issue number19
    Early online date8 Aug 2021
    Publication statusPublished - 11 Nov 2022

    Scopus Subject Areas

    • Economics and Econometrics

    User-Defined Keywords

    • Hong Kong
    • stated choice experiment
    • train service delays
    • Willingness to pay


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