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An empirical test of modal choice and allocative efficiency: Evidence from US coal transportation

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  • Satar, NurulHuda Mohd
  • Peoples, James
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    Abstract

    A generalized shipper transportation cost function is estimated to test whether coal shippers achieve allocative efficiency with respect to market prices when facing limited access to the full range of transportation services. Findings indicate that allocative efficiency with respect to market prices is achieved when shippers have access to all major transportation modes. In contrast, the condition for allocative efficiency is not met with respect to market prices when shippers' modal choices are limited to trucking and rail services. Findings for the sample of shippers who face limited shipping choices is interpreted as suggesting an over-use of trucks relative to the use of trains due to price distortions of transportation services.

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    File URL: http://www.sciencedirect.com/science/article/pii/S1366554510000141
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    Bibliographic Info

    Article provided by Elsevier in its journal Transportation Research Part E: Logistics and Transportation Review.

    Volume (Year): 46 (2010)
    Issue (Month): 6 (November)
    Pages: 1043-1056

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    Handle: RePEc:eee:transe:v:46:y:2010:i:6:p:1043-1056

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    Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/600244/description#description

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    Related research

    Keywords: Allocative efficiency Translog cost Transportation modal choice Factor of proportionality Infrastructure constraint Capacity constraint;

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