Derived Demand for Freight Transportation and Intermodal Substituabilities in Canada

This paper describes how the demand for the three modes of freight transportation, railway, highway, and waterway, have been formulated and estimated as the intermediate inputs to the production and distribution sectors of the economy. The resulting demand model has allowed free variation of substitution parameters. One of the major problems that impedes this kind of research is the availability of adequate data on freight rates. Although they were adjustments so as to reflect variations in the average length of haul, the data used in the paper are by no means ideal. Nevertheless the results show that the estimated share model explains extremely well the variations in the shares of three modes, and the estimated parameters of the demand functions generally conform to the expectations. The paper finds that there are significant substitutibilities of varying degrees among the three modes of freight transportation, and the cross price elasticities estimated by using the ad hoc demand models are likely to understate the true substitutability. The paper also finds that there is a lag structure in the shipper’s responses to changes in freight rates.

  • Corporate Authors:

    Transportation Research Forum

    P.O. Box 5074
    Fargo, ND  United States  58105
  • Authors:
    • Oum, Tae Hoon
  • Publication Date: 1977


  • English

Media Info

  • Media Type: Print
  • Edition: Volume XVIII, Number 1
  • Features: Figures; References; Tables;
  • Pagination: pp 56-67
  • Monograph Title: Transportation in Transition. Proceedings of the Eighteenth Annual Meeting

Subject/Index Terms

Filing Info

  • Accession Number: 01103259
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Jun 5 2008 10:34AM