The relevance of scale and scope economies in the provision of urban and intercity bus transport

The relevance of scope economies is central in the unbundling of competitive tendering introduced for the assignment of franchised monopolies in LPT services, concerning either urban or intercity local transport. We present a number of different cost specifications. The separable quadratic and the composite models allow for directly handling zero outputs and better fit the data. Moderate global scope economies are found (around 2%). By splitting global scope economies into its two components (fixed costs and cost complementarities savings), we find that fixed cost savings can be obtained from joint production. Density economies and scale economies are also detected.