Discussion Paper No.1503
Abstract :
This study shows the effects of the diversification of railway companies into real estate business on
their primary business and the growth of commercial areas along railway lines. Methodologically, a
model that combines the urban land use equilibrium model with the optimal train operation problem
is formulated and the results of the numerical simulations suggest that the railway company should
diversify into real estate in order to expand the retail market whose goods have property of cumulative
attractiveness.
Keywords : Diversification of railway companies; Urban land use equilibrium; Agglomeration economies; MPEC