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Specifying and Estimating a Regional Agricultural Railroad Demand Model

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  • Babcock, Michael W.
  • Gayle, Philip G.

Abstract

In recent years there have been few railroad demand studies. Also, no study has investigated the possibility of regional differences in railroad demand. The objective of the paper is to estimate railroad demand functions for wheat, corn, sorghum, and soybeans for the United States as well as the east and west regions. A two-region spatial equilibrium model is employed to specify the empirical model in which railroad tons originated is the dependent variable. The explanatory variables include railroad price per ton, crop production, and barge price per ton. The theoretically expected sign is negative for rail price. Alternatively, the expected sign is positive for crop production and barge rate. Results include estimates of railroad own-price elasticities and cross price elasticities relative to barge transport. The estimates also reveal regional differences in railroad grain demand.

Suggested Citation

  • Babcock, Michael W. & Gayle, Philip G., 2014. "Specifying and Estimating a Regional Agricultural Railroad Demand Model," Journal of the Transportation Research Forum, Transportation Research Forum, vol. 53(01).
    • Handle: RePEc:ags:ndjtrf:207422
    DOI: 10.22004/ag.econ.207422
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    References listed on IDEAS

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    1. Winston, Clifford, 1981. "A Disaggregate Model of the Demand for Intercity Freight Transportation," Econometrica, Econometric Society, vol. 49(4), pages 981-1006, June.
    2. Tae Hoon Oum, 1979. "A Cross Sectional Study of Freight Transport Demand and Rail-Truck Competition in Canada," Bell Journal of Economics, The RAND Corporation, vol. 10(2), pages 463-482, Autumn.
    3. Martland, Carl D., 2012. "Productivity Improvements in the U.S. Rail Freight Industry, 1980-2010," Journal of the Transportation Research Forum, Transportation Research Forum, vol. 51(3).
    4. Babcock, Michael W. & German, Wade, 1982. "Forecast of Agricultural Rail Demand to 1985," 23rd Annual Transportation Research Forum, New Orleans, Louisiana, October 28-30, 1982 311554, Transportation Research Forum.
    5. Friedlaender, Ann F & Spady, Richard H, 1980. "A Derived Demand Function for Freight Transportation," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 432-441, August.
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    Cited by:

    1. Jo, Jungkeon & Secor, William, 2022. "Demand for Rail Transportation of Grain to the Southeastern U.S," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322453, Agricultural and Applied Economics Association.

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