Marginal railway track renewal costs: A survival data approach

• We estimate the marginal cost of railway renewal using survival analysis.
• A model based on the aggregate of freight and passenger tonnage is recommended.
• We estimate the marginal cost to approximately SEK 0.002 per gross tonne kilometre.

In this paper, renewal costs for railway tracks are investigated using survival analysis. The purpose is to derive the effect from increased traffic volumes on rail renewal cycle lengths and to calculate associated marginal costs. A flow sample of censored data containing almost 1300 observations on the Swedish main railway network is used. We specify Weibull regression models, and estimate deterioration elasticities for total tonnage as well as for passenger and freight tonnages separately. Marginal costs are calculated as a change in present values of renewal costs from premature renewal following increased traffic volumes. The marginal cost for total tonnage is estimated to approximately SEK 0.002 per gross ton kilometre.