The value of local railways: An approach using the contingent valuation method

In Japan, many local railway lines in regional areas are on the brink of closure due to accumulated deficits. Although railways are generally said to have their own option and non-use values compared with buses, conventional cost benefit analysis does not evaluate these values sufficiently because there have been few quantitative research studies into this issue. This paper, focusing on three different Japanese local railways, estimates railways' additional value over buses using the contingent valuation method (CVM). The CVM here is to estimate not an absolute total economic value of a specific railway but a relative value of railway to replacement buses. Therefore, our survey research has the advantage that data obtained from different railways can be comparable to a certain extent. The results show that two of three cases have their own additional value over buses of around twenty percent, and the other one has additional value of around ten percent. There is no big difference in evaluation between direct users and non-users at present. Also, the survey shows that, if train frequency increases, a certain number of residents, including potential users, are willing to pay more than the current fares.