Public policies enacted in the 1980s have profoundly altered the competitive environment in the transportation market. This fact is widely recognized, but empirical estimation of the impact of transportation policy in specific markets has rarely been attempted. The principal objective of the paper is to illustrate the significance of public policy for rail and truck market shares. This is accomplished by measuring the impact of the following policies: (1) The impact of the Motor Carrier Act of 1980 (MCA80) and the Surface Transportation Assistance Act of 1982 (STAA82) on rail and motor carrier market shares in selected manufactured goods markets; (2) The effect of anti-lock brake systems on motor carrier costs and the motor carrier equipment industry; (3) The impact of the STAA82 on motor carrier equipment sales; and (4) Pricing actions railroads could take to mitigate the effects of post-1980 motor carrier policy. The first objective of the paper is achieved through the estimation of a time series regression model in which rail market share in a given industry is a function of the following independent variables: (a) rail prices, (b) truck prices, (c) interest rates, (d) motor carrier productivity increases due to STAA82 and (e) a series of dummy variables to estimate the impact of MCA80. The second and third objectives are accomplished through estimation of times series regression models in which truck trailer demand is a function of (a) interest rates, (b) business fixed investment, (c) a dummy variable to measure the "pre buy" effect of anti-lock brake requirements, and (d) a dummy variable to measure the impact of STAA82 on 1984 truck trailer demand. The fourth objective is achieved by estimating rail price elasticities in specific manufactured goods markets.

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  • Accession Number: 00490018
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Dec 31 1989 12:00AM