Social welfare impact analysis of the Sit-Arequipa concession model

Abstract

This article reflects the reality of concession contracts in terms of urban public transport, its objective is to determine a rate regulation method that will optimize social welfare in the SIT-Arequipa concession model, the methodology used was based on the approach quantitative that was made up of two methods, the regulatory tariff model by internal rate of return that was contrasted with the data obtained by applying the price cap model or RPI-X. As a research hypothesis, the study set out to establish whether the rate regulation model by factor X (price cap) is the most efficient for the concession modality of the Integrated Transport System in intermediate cities such as Arequipa, being subjected to a series of analyzes. that allowed to observe the variables that make up the financial systems of this transport system and whose result showed that, as long as the rate regulation model by maximum price or RPI-X is incorporated, sustained decreases in the end user rate of public transport can be obtained, which leads to improvements in social welfare.