Abstract
We study the effects of entry deregulation in the Finnish interurban bus market. We find that the number of operators increased on routes connecting large and mid-sized cities. Increased competition resulted in 29% lower prices in the interurban bus market. Consistent with our evidence on entry, we find that prices decreased on routes connecting large and mid-sized cities, while on routes connecting smaller cities, we find no significant change in prices. We also study how the reform affected the long-distance railway market and find that increased intermodal competition resulted in a 22% price decrease. Overall, we find that the entry deregulation benefited consumers.