ABSTRACT
In the bus sector public transport firms on average produce under constant or increasing returns to scale. Government should keep this in mind when developing a policy for non-interference in mergers and acquisitions. In this chapter we assess five regulatory regimes on efficiency and equity objectives of regional and local public transport authorities. For that purpose data on 21 European cities and regions are used. We find that a strong regulatory national climate coincides with priority to equity objectives at the regional level. Also, a laissez faire regime tends to go together with priority on efficiency objectives. Furthermore gross costs contracts (cost risks borne by the operator, revenue risks borne by the responsible authority) are the most popular in Europe.
