On Thu, Jun 29, 2006 at 07:23:07PM +0530, Devdas Bhagat wrote: > Rishab, could we actually compare based on PPP (or as a fraction of > income?) as well? At 750 INR for 60 km, it would actually be cheaper to > drive (or go by bus).
this depends on whether what we're comparing is service or capital intensive. for service-intensive sectors, such as health, it makes sense to compare based on PPP (as with the $ figures i provided in my mail on healthcare). i guess that the cost of rail transport is at least for the first decade or so capital-intensive. given reasonably free trade, capital costs are the same worldwide, so purchasing-power is not a useful concept and market exchange rates provide the best comparison. the delhi metro, which is using pretty new technology, is expensive, and the only reason tickets could cost much less than in seoul is massive subsidies and/or much larger passenger volumes. (swiss - and european rail in general - transport prices are so high because one of the attributes valued is frequency of service, which typically means trains run empty most of the time. with fewer passengers, each ticket must cost more. ) -rishab
