Due to heavy deficits, the privatization of Japanese National Railways (JNR) was initiated on April 1, 1987 and was geographically divided into six different railway companies for transporting passengers. This paper investigates the impact of market competition on conventional rail (CR) passengers’ time cost by using a difference-in-differences (DID) approach and directional origin-destination (OD) pair level data in four periods: two years before JNR’s privatization (1976 and 1986) and two years after JNR’s privatization (1996 and 2006). It investigates the effect of market competition on passengers’ time cost in the regions where CR competes with high-speed rail (HSR), when comparing with monopoly region after JNR privatization. The result of this analysis shows that market competition leads to an increment in passengers’ time cost by CR in duopoly regions when comparing with the change of time cost by CR in monopoly region, but it is not statistically significant.

The present work was supported through the Hiroshima University TAOYAKA Program for creating a flexible, enduring, peaceful society, funded by the Program for Leading Graduate Schools, Ministry of Education, Culture, Sports, Science and Technology.