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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

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.

Suggested Citation

  • Satar, NurulHuda Mohd & Peoples, James, 2010. "An empirical test of modal choice and allocative efficiency: Evidence from US coal transportation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 46(6), pages 1043-1056, November.
    • Handle: RePEc:eee:transe:v:46:y:2010:i:6:p:1043-1056
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    Citations

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    Cited by:

    1. Goh, Shao Hung & Chan, Yuxian, 2016. "Operational shadow pricing in back haul container shipping," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 92(C), pages 3-15.
    2. Pittman, Russell & Jandova, Monika & Krol, Marcin & Nekrasenko, Larysa & Paleta, Tomas, 2019. "The Effectiveness of EC Policies to Move Freight from Road to Rail: Evidence from CEE Grain Markets," MPRA Paper 97571, University Library of Munich, Germany.
    3. Mou, Dunguo & Li, Zhi, 2012. "A spatial analysis of China's coal flow," Energy Policy, Elsevier, vol. 48(C), pages 358-368.
    4. Li, Nan & Chen, Wenying, 2018. "Modeling China’s interprovincial coal transportation under low carbon transition," Applied Energy, Elsevier, vol. 222(C), pages 267-279.
    5. Ndembe, Elvis & Bitzan, John D., 2022. "A shadow price approach examining service quality in a heavily captive U.S. freight transportation market: The case of grain transport," Transport Policy, Elsevier, vol. 116(C), pages 1-10.
    6. Ndembe, Elvis & Bitzan, John, 2018. "Grain freight elevator consolidation, transportation demand, and the growth of shuttle facilities," Research in Transportation Economics, Elsevier, vol. 71(C), pages 54-60.
    7. Winebrake, James J. & Green, Erin H. & Comer, Bryan & Corbett, James J. & Froman, Sarah, 2012. "Estimating the direct rebound effect for on-road freight transportation," Energy Policy, Elsevier, vol. 48(C), pages 252-259.
    8. Bitzan, John D. & Karanki, Fecri, 2022. "Costs, density economies, and differential pricing in the U.S. railroad industry," Transport Policy, Elsevier, vol. 119(C), pages 67-77.
    9. Ahmad Subhan, 2017. "Disputes on Public Roads: Coal Transportation Policy and Actor Networks in Jambi Province, Indonesia," Journal of Social and Development Sciences, AMH International, vol. 7(4), pages 38-45.

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