ECONOMIES OF SCALE AND THE REORGANIZATION BENEFITS OF HIGHWAY IMPROVEMENTS

THIS IS A STUDY FOR THE PURPOSE OF ESTIMATING THE RELATIVE IMPORTANCE OF "EXISTING-USE" AND "SUBSTITUTION" BENEFITS RESULTING FROM THE ECONOMIES OF SCALE OF GREATER EFFICIENCY IN THE ORGANIZATION OF PRODUCTION. A MODEL WAS CONSTRUCTED WHICH UTILIZED DATA FROM THE DETAILED STUDY OF INTER-INDUSTRY RELATIONS IN THE AMERICAN ECONOMY IN 1947 UNDERTAKEN DURING THE PERIOD 1949-53 BY THE BUREAU OF LABOR STATISTICS AND OTHER GOVERNMENT AND UNIVERSITY AGENCIES. THE MODEL IS THEN APPROPRIATELY MODIFIED TO BRING IN MORE RELEVANT HIGHWAY TRANSPORTATION DATA. THE INDUSTRY MODEL CONSTRUCTED IN 1947 PLUS ADDITIONAL INFORMATION CONCERNING THE TRUCKING INDUSTRY RESULTS IN A MODEL CONTAINING 163 INDUSTRIES. EACH INDUSTRY IS ASSIGNED AN INDEX OF MANUFACTURING ECONOMIES OF SCALE. THE INDEPENDENT VARIABLE IS THE ASSUMPTION THAT THERE IS A 25 PER CENT REDUCTION IN UNIT MOTOR TRANSPORTATION COSTS. THE DEPENDENT VARIABLES ARE THE QUANTITIES OF TRANSPORTATION SERVICES USED BY EACH INDUSTRY. IT IS CONCLUDED THAT THE TOTAL BENEFITS OF HIGHWAY INVESTMENT ARE LIKELY TO BE GREATER THAN THE TOTAL BENEFITS RESULTING FROM THE LEVEL OF TRANSPORTATION UNDERTAKEN BEFORE THE INVESTMENT WAS MADE. /VHRC/

  • Supplemental Notes:
    • Res Rept, SUPPLEMENT TO THE NATURE AND MEASUREMENT OF HWY
  • Corporate Authors:

    Northwestern University, Evanston

    Transportation Center, Leverone Hall
    Evanston, IL  United States  60201
  • Authors:
    • Mohring, H G
    • Williamson, H F
  • Publication Date: 1960

Subject/Index Terms

Filing Info

  • Accession Number: 00201459
  • Record Type: Publication
  • Source Agency: Virginia Highway Research Council
  • Files: TRIS
  • Created Date: Apr 20 1970 12:00AM