Ann F. Friedlaender

TRUCK TECHNOLOGY AND EFFICIENT MARKET STRUCTURE

A bstractUsing the trucking industry as an example, this paper extends the empirical research on multiproduct firms to analyze the efficient numbers of firms in the industry. The paper first considers the issue of size related economies and argues that although there are limited economies of scale, economies of scope appear to be sufficiently strong to explain the observed large number of mergers and acquisitions that have occurred in the industry. The paper then considers the efficient number of firms in the industry. Using the concept of ray-average cost, it shows that for the output combinations observed in the industry, the efficient number of firms required to serve industry output is quite large.

Differential incidence in the presence of initial distorting taxes

Abstract This paper extends the two-sector, two-factor, general-equilibrium analysis of differential tax incidence by considering an initial situation where the government finances a fixed commodity bundle by distorting commodity and factor taxes. This alters the traditional analysis of marginal differential incidence in a fundamental way by necessitating the simultaneous determination of the change in the rental-wage ratio, the change in aggregate welfare and the change in an endogenously adjusting tax parameter. This contributes towards an integration of the study of the excess-burden effects and the distributional effects of a given tax situation.

Capital taxation in a dynamic general equilibrium setting

Abstract The familiar two-factor, two-commodity incidence model is extended to a dynamic setting in which the supply of capital is variable and the government can use money or bonds to balance its budget in addition to neutral lump sum taxation. The dynamic incidence effects of a sectoral tax on capital are qualitatively similar to the static incidence effects when the government balances its budget with neutral taxes, but are qualitatively different when the government uses money or bonds. In this case, while capital bears the burden of the tax in the short run, it is able to shift it in the long run.

Price distortions, financing constraints and second-best investment rules in the transportation industries

Abstract This paper analyzes the second-best pricing and investment rules to be followed in the transportation industries in the presence of intermodal competition, exogenous price distortions, and financing constraints, using both theoretical and simulation analysis. It shows that price distortions and financing constraints in one mode will not only affect the investment rules in that mode, but will also affect the pricing rules and investment decisions in all other modes. While the theoretical discussion indicates that the second-best pricing and investment rules are quite complex, the simulation analysis indicates that the benefit function is relatively flat, suggesting that the costs of using simpler first-best rules may be relatively small.