• Journal of the Korean Operations Research and Management Science Society
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• v.41 no.4
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• pp.1-13
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• 2016

In response to the government's recent attempts to introduce competition and efficiency criteria in the rural railway service provision, this study is to empirically estimate public service values on continuous operation of two rural railways-Young Dong Line (YDL) and Donghae Nambu Line (DNL)-that will be realized beyond the passengers' use values. Based on a contingent valuation survey conducted on 600 passengers and local residents, YDL respondents were willing to pay significantly higher amount compared to those of DNL respondents. Especially tourists traveling on YDL were willing to pay the highest amount, and local residents of DNL were willing to pay relatively high amount. The results will provide useful information in makings decisions on the selection of PSO railways, the amount of PSO compensation and which railways to close, so on.