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Density and Integration Effects on Class I U.S. Freight Railroads

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  • Ivaldi, M
  • McCullough, G J

Abstract

We investigate some technological aspects of railroading relevant to the debate on open access by estimating a multiproduct cost function with both operational outputs and infrastructure maintenance outputs. We find strong cost complementarities among operational outputs, but not between operations and infrastructure. The latter result implies that at the levels of output that characterize freight rail operations in the U.S. there may be no inherent technological advantages from vertical integration. The former suggests though (for reasons that we develop below) that competitive access alone will not necessarily lead to competitive outcomes in rail freight markets. Copyright 2001 by Kluwer Academic Publishers

Suggested Citation

  • 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.
  • Handle: RePEc:kap:regeco:v:19:y:2001:i:2:p:161-82
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    JEL classification:

    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General

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