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Information, Decisions, and Productivity: On-Board Computers and Capacity Utilization in Trucking

  • Thomas N. Hubbard
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    Productivity reflects not only how efficiently inputs are transformed into outputs, but also how well information is brought to bear on resource allocation decisions. This paper examines this empirically by looking at how on-board computer (OBC) adoption has affected capacity utilization in the trucking industry. Estimates using 1997 data indicate that capacity utilization has increased by an average of 13% among trucks for which advanced OBCs have been adopted. The average benefits to adopters are higher in 1997 than 1992, suggesting lags to the returns to adoption, and are highly skewed across hauls. The 1997 estimates imply that OBC-enabled improvements in communications and resource allocation decisions have led to a 3% increase in capacity utilization in the industry, which translates to billions of dollars of annual benefits. The commercialization of other wireless networking applications has the potential to generate analogous benefits in other contexts.

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    File URL: http://www.nber.org/papers/w8525.pdf
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    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8525.

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    Date of creation: Oct 2001
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    Publication status: published as Hubbard, Thomas N. "Information, Decisions, And Productivity: On-Board Computers And Capacity Utilization In Trucking," American Economic Review, 2003, v93(4,Sep), 1328-1353.
    Handle: RePEc:nbr:nberwo:8525
    Note: IO PR
    Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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    1. George P. Baker & Thomas N. Hubbard, 2000. "Contractibility and Asset Ownership: On-Board Computers and Governance in U.S. Trucking," NBER Working Papers 7634, National Bureau of Economic Research, Inc.
    2. Hubbard, Thomas N, 2001. "Contractual Form and Market Thickness in Trucking," RAND Journal of Economics, The RAND Corporation, vol. 32(2), pages 369-86, Summer.
    3. Lichtenberg, F.R. & Lehr, B., 1996. "Computer Use and Productivity Growth in federal Government Agencies," Papers 96-10, Columbia - Graduate School of Business.
    4. Thomas N. Hubbard, 2000. "The Demand For Monitoring Technologies: The Case Of Trucking," The Quarterly Journal of Economics, MIT Press, vol. 115(2), pages 533-560, May.
    5. Susan Athey & Scott Stern, 2002. "The Impact of Information Technology on Emergency Health Care Outcomes," RAND Journal of Economics, The RAND Corporation, vol. 33(3), pages 399-432, Autumn.
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