EFFECT OF RATES ON THE DEMAND FOR RAILROAD SERVICES

This paper will report on two attempts to estimate railroad demand elasticities, both based on comparisons of one commodity with another. One is static, attempting to determine if the railroad's market share is lower on commodities with high rates than on commodities with low rates. The other is more dynamic, asking if for the commodities on which rates were raised, did railroads lose more business than on those for which rates were reduced, and if so, how much. When this investigation was started the 1969 rail waybill tape had not yet been tabulated, and comparable data was not available for a long enough period to use a historical approach. Thus it was decided to use a cross-sectional approach concentrating on the variation of rail market shares with the level of rail rates on different commodities. This section of the paper will report on cross-sectional regressions of rail's share of the total freight market as a function of the rail rate and the extent to which different industries are supplied with rail sidings, the size of shipment, and the length of haul. Regressions were run for all distances and weights, for five distance blocks (under 200 straightline miles, 200-400 miles, 400-600 miles, 600-1,000 miles, and over 1,000 miles), and for 20 distance-weight blocks. The results for the distance weight blocks will not be discussed in detail. The year 1965 was used for the rail waybill analysis because a program had previously been written to analyze the rail way bill tape for that year and could be modified for this study.

• Supplemental Notes:
  • Proceedings of the Thirteenth Annual Meeting, Transportation Research Forum, Brown Palace Hotel, Denver, Colorado, 8-10 November 1972.
• Corporate Authors:

  Transportation Research Forum

  Brown Palace Hotel
  Denver, CO  United States 
• Authors:
  • Miller, Eric J
• Publication Date: 1972

Media Info

• Serial:
  • Volume: 13
  • Issue Number: 1

Subject/Index Terms

• TRT Terms: Demand; Freight transportation; Rates
• Subject Areas: Economics; Freight Transportation; Railroads;

Filing Info

• Accession Number: 00047942
• Record Type: Publication
• Report/Paper Numbers: Proceeding
• Files: TRIS
• Created Date: Dec 13 1974 12:00AM