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Against the stand-alone-cost test in U.S. freight rail regulation

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  • Russell Pittman

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Abstract

The stand-alone-cost test has become an expensive, extensive, and time-consuming part of the regulatory practice of the U.S. Surface Transportation Board in the performance of its statutory duty to protect "captive shippers" from monopoly rail rates. Worse, a close examination of the history of its adoption and application suggests only a very tenuous connection with its claimed intellectual foundations, the classic works of Faulhaber (1975) and Baumol, Panzar, and Willig (1982). It is time to retire this tool and replace it with something simpler and more effective and transparent.

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File URL: http://hdl.handle.net/10.1007/s11149-010-9130-3
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Bibliographic Info

Article provided by Springer in its journal Journal of Regulatory Economics.

Volume (Year): 38 (2010)
Issue (Month): 3 (December)
Pages: 313-326

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Handle: RePEc:kap:regeco:v:38:y:2010:i:3:p:313-326

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Web page: http://www.springerlink.com/link.asp?id=100298

Related research

Keywords: Railroads; Regulation; Stand alone cost; Surface Transportation Board; Cross-subsidy; Contestability; K23; L51; L92;

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  1. Ellig, Jerry, 2002. "Railroad Deregulation and Consumer Welfare," Journal of Regulatory Economics, Springer, vol. 21(2), pages 143-67, March.
  2. Russell Pittman, 2004. "Russian Railways Reform and the Problem of Non-discriminatory Access to Infrastructure," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 75(2), pages 167-192, 06.
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