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Spatial Price Competition and the Demand for Freight Transportation

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  • Inaba, Fred S
  • Wallace, Nancy E

Abstract

Two important issues in econometric freight transportation demand analysis are addressed: (1) the simultaneity between quantity shipped and mode/destination choices, and (2) the effect of spatial price competition on the demand for the transportation factor. In the theoretical model, spatial price competition determines the firm's market area and, thus, determines its sales and shipment sizes. The model is estimated using switching regression techniques, since shipment size and mode/destination choice are derived from the same optimization problem. The empirical model provides consistent estimates of unconditional freight demand. These estimates are needed to forecast transportation flows and derive elasticities for policy analysis. Copyright 1989 by MIT Press.

Suggested Citation

  • Inaba, Fred S & Wallace, Nancy E, 1989. "Spatial Price Competition and the Demand for Freight Transportation," The Review of Economics and Statistics, MIT Press, vol. 71(4), pages 614-625, November.
  • Handle: RePEc:tpr:restat:v:71:y:1989:i:4:p:614-25
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    Cited by:

    1. Abate , Megersa & Vierth , Inge & Karlsson , Rune & de Jong , Gerard & Baak , Jaap, 2016. "Estimation and implementation of joint econometric models of freight transport chain and shipment size choice," Working papers in Transport Economics 2016:1, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    2. Abate, Megersa & de Jong, Gerard, 2014. "The optimal shipment size and truck size choice – The allocation of trucks across hauls," Transportation Research Part A: Policy and Practice, Elsevier, vol. 59(C), pages 262-277.
    3. Moon, Sang & Koo, Won W., 2006. "Effects of the Panama Canal on U.S. Competitiveness on the World Soybean Market," 2006 Annual meeting, July 23-26, Long Beach, CA 21418, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Abate, Megersa & Vierth, Inge & de Jong , Gerard, 2014. "Joint econometric models of freight transport chain and shipment size choice," Working papers in Transport Economics 2014:9, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    5. Cristina Borra & Luis Palma, 2004. "Analyzing the determinants of freight shipper's behavior: own account versus purchased transport," ERSA conference papers ersa04p163, European Regional Science Association.
    6. Kieran P. Donaghy, 2012. "The Co-evolution of Logistics, Globalization and Spatial Price Competition: Implications for a Unified Theory of Trade and Location," Chapters,in: Globalization Trends and Regional Development, chapter 3 Edward Elgar Publishing.
    7. Train, Kenneth & Wilson, Wesley W., 2007. "Spatially Generated Transportation Demands," Research in Transportation Economics, Elsevier, vol. 20(1), pages 97-118, January.

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