|This paper, first, measures overall efficiency for Japanese railway business, using the concept of TFP (Total Factor Productivity). On the basis of TFP analysis these about 30 years, it is shown that productivity of railway business can steadily increase through appropriate management policy. Second, in order to get some information of price regulation, the performance of Price Cap regulation formula(I−TFP) is empirically examined. Then is it shown that Price Cap regulation can be introduced to some private railway companies under the specific conditions. Last, it is also proposed that price regulation must be essentially formed, considering the SCE (Scale Economies) estimation of each railway market segment.