Abstract
In 1989, the exclusive licenses of Swedish bus companies to run certain routes were abolished. The reform made it possible for local and regional public transport authorities1 to procure bus services by means of competitive tendering. Due to the resulting lowering of entry barriers and increase in competition between bus companies, the reform came to be known as the bus deregulation of Sweden. In 1998, Alexandersson, Fölster and Hultén published a study of the early effects of competitive tendering (hereby referred to as Alexandersson et al., 1998). The period covered was 1987-1994. It was already clear that competitive tendering had resulted in major changes in terms of market structure. Many municipality-owned companies had been dismantled, following their inability to defend their contracts when tendered or through acquisitions. Overall, seller concentration had increased. More than 60 per cent of all traffic had been tendered at least once, and regression analyses of statistical data were used to estimate, among other things, the effects upon costs from increasing the share of traffic subjected to tendering.