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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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    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. Mou, Dunguo & Li, Zhi, 2012. "A spatial analysis of China's coal flow," Energy Policy, Elsevier, vol. 48(C), pages 358-368.
    3. 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.

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