IS RAILWAY TRANSPORTATION SECTOR A NATURAL MONOPOLY: EMPIRICAL EVIDENCE FROM TURKISH STATE RAILWAYS (TCDD)

Authors : Nermin Yaşar Başkaraağaç, Halim Can Avcı

Pages : 677-697

Doi:10.30626/tesamakademi.1641224

View : 42 | Download : 52

Publication Date : 2025-07-31

Article Type : Research Paper

Abstract :This paper analyses whether the Turkish railway industry possesses features indicative of a natural monopoly. For this purpose, we utilize subadditivity analysis to assess and compare the efficiency levels of TCDD under monopoly conditions with hypothetical duopoly scenarios, considering the time span from 1990 to 2016. Our findings reveal that the cost function displays subadditivity for all configurations within the permissible range, confirming TCDD\\\'s classification as a natural monopoly before the separation in 2016. This suggests that a decrease in production costs is improbable when two firms engage in activities within the Turkish railway sector. Given that a natural monopoly with a single company may result in prices surpassing socially desirable levels, it becomes imperative for policymakers to enact regulations that simultaneously safeguard consumers and maintain the integrity of the natural monopoly within the railway sector. Striking a careful balance between ensuring affordability, accessibility, and efficiency is essential while preventing potential monopolistic abuses.
Keywords : Doğal tekel, eklenemezlik, tutarlılık bölgesi, demiryolları sistemi, rekabet

ORIGINAL ARTICLE URL