Railroad Pricing and Revenue-to-Cost Margins in the Post-Staggers Era
The aim of this paper is to look more carefully at the structure of rail rates that has evolved in the 25-year period since the Staggers Rail Act and to assess its impact on the railroad industry. The paper does this by investigating the relationship between car-type-specific marginal costs and car-type-specific rates. These define a set of Lerner indices that are the traditional economic measure of pricing behavior. Taken individually, the Lerner indices are a measure of the market conditions that railroads confront in commodity-specific markets. Taken together in combination with aggregate output measures, the Lerner indices help to determine whether railroad revenues are adequate to cover rail costs. Comparing the ratio of total annual revenues received by each Class I railroad to total (econometrically) estimated costs, we find that this ratio has averaged less than 1.06 in the 23-year period between 1981 and 2004.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 20 (2007)
Issue (Month): 1 (January)
|Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/620614/description#description|
|Order Information:|| Postal: http://www.elsevier.com/wps/find/supportfaq.cws_home/regional|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- McFadden, Daniel, 1978. "Cost, Revenue, and Profit Functions," Histoy of Economic Thought Chapters,in: Fuss, Melvyn & McFadden, Daniel (ed.), Production Economics: A Dual Approach to Theory and Applications, volume 1, chapter 1 McMaster University Archive for the History of Economic Thought.
- Ernst Berndt & Ann Friedlaender & Judy Chiang & Christopher Vellturo, 1993. "Cost effects of mergers and deregulation in the U.S. Rail industry," Journal of Productivity Analysis, Springer, vol. 4(1), pages 127-144, June.
- Ivaldi, M & McCullough, G J, 2001.
"Density and Integration Effects on Class I U.S. Freight Railroads,"
Journal of Regulatory Economics,
Springer, vol. 19(2), pages 161-182, March.
- Ivaldi, M. & McCullough, G., 1999. "Density and Integration Effects on Class I U.S. Freight Railroads," Papers 99.526, Toulouse - GREMAQ.
- Ivaldi, Marc & Mccullough, Gerard J., 1999. "Density and Integration Effects on Class I U.S. Freight Railroads," IDEI Working Papers 93, Institut d'Économie Industrielle (IDEI), Toulouse.
- Diewert, Walter E & Wales, Terence J, 1987. "Flexible Functional Forms and Global Curvature Conditions," Econometrica, Econometric Society, vol. 55(1), pages 43-68, January.
- W. Erwin Diewert & T.J. Wales, 1989. "Flexible Functional Forms and Global Curvature Conditions," NBER Technical Working Papers 0040, National Bureau of Economic Research, Inc.
- Ann F. Friedlaender, 1992. "Coal Rates and Revenue Adequacy in a Quasi-Regulated Rail Industry," RAND Journal of Economics, The RAND Corporation, vol. 23(3), pages 376-394, Autumn.
- Pittman Russell, 2005. "Structural Separation to Create Competition? The Case of Freight Railways," Review of Network Economics, De Gruyter, vol. 4(3), pages 1-16, September.
- Braeutigam, Ronald R & Daughety, Andrew F & Turnquist, Mark A, 1982. "The Estimation of a Hybrid Cost Function for a Railroad Firm," The Review of Economics and Statistics, MIT Press, vol. 64(3), pages 394-404, August.
- Wilson, Wesley W, 1997. "Cost Savings and Productivity in the Railroad Industry," Journal of Regulatory Economics, Springer, vol. 11(1), pages 21-40, January.
- Scott E. Atkinson & Joe Kerkvliet, 1986. "Measuring the Multilateral Allocation of Rents: Wyoming Low-Sulfur Coal," RAND Journal of Economics, The RAND Corporation, vol. 17(3), pages 416-430, Autumn.
- Zvi Griliches, 1972. "Cost Allocation in Railroad Regulation," Bell Journal of Economics, The RAND Corporation, vol. 3(1), pages 26-41, Spring. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:eee:retrec:v:20:y:2007:i:1:p:153-178. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
If references are entirely missing, you can add them using this form.