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Productivity in U.S. Railroads, 1951-1974


  • Douglas W. Caves
  • Laurits R. Christensen
  • Joseph A. Swanson


This paper develops estimates of U.S. railroad productivity by using methods based on the neoclassical theory of production. We find that railroad productivity grew at the average annual rate of 1.5 percent per year during the 1951-1974 period. Using conventional measurement procedures for comparison, we find productivity growth of 3.6 percent per year. The lower estimate of 1.5 percent is the result of using procedures which better represent the railroad production process. These include using (1) estimated cost elasticities, rather than revenue shares, as output weights, (2) actual cost shares, rather than national income shares, as input weights, and (3) input and output weights which change annually.

Suggested Citation

  • Douglas W. Caves & Laurits R. Christensen & Joseph A. Swanson, 1980. "Productivity in U.S. Railroads, 1951-1974," Bell Journal of Economics, The RAND Corporation, vol. 11(1), pages 166-181, Spring.
  • Handle: RePEc:rje:bellje:v:11:y:1980:i:spring:p:166-181

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    References listed on IDEAS

    1. Samet, Dov & Tauman, Yair, 1982. "The Determination of Marginal Cost Prices under a Set of Axioms," Econometrica, Econometric Society, vol. 50(4), pages 895-909, July.
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    Cited by:

    1. Gao, Zhifeng & Yu, Xiaohua & Lee, Jonq-Ying, 2013. "Consumer demand for diet quality: evidence from the healthy eating index," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(3), September.
    2. Eero Lehto, 1990. "Productivity in the Finnish customs," Finnish Economic Papers, Finnish Economic Association, vol. 3(2), pages 134-145, Autumn.
    3. Jakir Hussain & Jean-Thomas Bernard, 2016. "Flexible Functional Forms and Curvature Conditions: Parametric Productivity Estimation in Canadian and U.S. Manufacturing Industries," Working Papers 1612e, University of Ottawa, Department of Economics.
    4. Rinki Sarkar, 1998. "Economic Characteristics Of The Urban Bus Transit Industry- A Comparative Analysis Of Three Regulated Metropolitan Bus Corporations In India," Working papers 54, Centre for Development Economics, Delhi School of Economics.
    5. Bitzan, John D., 1997. "Railroad Cost Considerations and the Benefits/Costs of Mergers," MPC Report 231799, North Dakota State University, Upper Great Plains Transportation Institute.
    6. Li, Wei, 1997. "The Impact of Economic Reform on the Performance of Chinese State Enterprises, 1980-1989," Journal of Political Economy, University of Chicago Press, vol. 105(5), pages 1080-1106, October.
    7. António Lobo & António Couto, 2016. "Technical Efficiency of European Metro Systems: The Effects of Operational Management and Socioeconomic Environment," Networks and Spatial Economics, Springer, vol. 16(3), pages 723-742, September.
    8. Leonardo J. Basso & Sergio R. Jara-Díaz & William G. Waters, 2011. "Cost Functions for Transport Firms," Chapters,in: A Handbook of Transport Economics, chapter 12 Edward Elgar Publishing.
    9. repec:hal:wpaper:halshs-01261980 is not listed on IDEAS
    10. Wilson, Wesley W. & Bitzan, John, 2003. "Industry Costs and Consolidation: Efficiency Gains and Mergers in the Railroad Industry," MPC Report 231700, North Dakota State University, Upper Great Plains Transportation Institute.
    11. Waters II, William G., 2007. "Evolution of Railroad Economics," Research in Transportation Economics, Elsevier, vol. 20(1), pages 11-67, January.
    12. Piet Rietveld & Stefan van Woudenberg, 2007. "Second-best Decision Making of Railway Operators: How to Fix Fares, Frequency and Vehicle Size," Journal of Transport Economics and Policy, University of Bath, vol. 41(3), pages 363-385, September.
    13. Scott Atkinson & Christopher Cornwell, 1998. "Estimating Radial Measures of Productivity Growth: Frontier vs Non-Frontier Approaches," Journal of Productivity Analysis, Springer, vol. 10(1), pages 35-46, July.
    14. Ingmar R. Prucha & M. Ishaq Nadiri, 1991. "Endogenous Capital Utilization and Productivity Measurement in Dynamic Factor Demand Models: Theory and an Application to the U.S. Electrical..," NBER Working Papers 3680, National Bureau of Economic Research, Inc.
    15. Marc Gaudry & Emile Quinet, 2015. "Correlation within SNCF administrative regions among track segment maintenance cost equation residuals of a country-wide model," PSE Working Papers halshs-01112249, HAL.
    16. Marc Gaudry & Emile Quinet, 2016. "Box-Cox transformations of terms nesting the Trans-Log: the example of rail infrastructure maintenance cost," PSE Working Papers halshs-01261980, HAL.
    17. Seedah, Dan & Harrison, Robert, 2010. "Measuring the Impact of Intermodal Rail Movements in State Transportation Planning," 51st Annual Transportation Research Forum, Arlington, Virginia, March 11-13, 2010 207257, Transportation Research Forum.
    18. Richard Barke & William Riker, 1982. "A political theory of regulation with some observations on railway abandonments," Public Choice, Springer, vol. 39(1), pages 73-106, January.
    19. Bitzan, John, 2000. "Railroad Cost Conditions: Implications for Policy," UGPTI Department Publication 231804, North Dakota State University, Upper Great Plains Transportation Institute.
    20. Lovell, Knox, 2001. "Future Research Opportunities in Efficiency and Productivity Analysis," Efficiency Series Papers 2001/01, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).

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