The economics of rail passenger responses to delays: delay perception, satisfaction, valuation and compensation

Though delays negatively impact rail passengers, eliminating all their incidences is impossible. Hence, it is important to understand the impacts of delays of various lengths and ways in which passengers can be compensated for the resulting disutility. This can, in turn, help dictate regulatory, operational and investment priorities. Against this background, this thesis aims to review the currently operating delay compensation mechanisms and investigate the link between delay occurrence, delay perception and satisfaction impacts. The results suggest that the current compensation scheme rules lead to an increasing revenue burden of the scheme for long-distance operators, highlighting the need for further research comparing the scheme’s costs and benefits. Subsequently, it was indicated that shorter delays are not always perceived by passengers and are likely to have a smaller impact on passenger satisfaction with marginal disutility of delay likely being non-constant across the different delay levels. At the same time, it was highlighted that journey quality, delay at departure and journey time also affect delay perception and satisfaction. The probability of perceiving a delay was estimated to be larger than the equivalent probability of being dissatisfied with the same delay, demonstrating the existence of a gap between delay perception and dissatisfaction. Finally, the journey satisfaction data were used to derive lateness multipliers, a conversion rate between a minute of delay and scheduled journey time. The calculated values were found to be larger than the estimates obtained from the traditionally used stated preference studies. The outcomes of the research conducted as part of this thesis can help design passenger delay compensation schemes and devise performance strategies and targets for railways. Moreover, the presented analysis provides additional evidence towards possible non-linearities in delay impacts and highlights the potential of transport satisfaction data in economic valuation.