John Bitzan

Productivity Growth and Some of Its Determinants in the Deregulated U.S. Railroad Industry

This study analyzes the effects of an important postderegulation innovation on rail freight productivity: the elimination of cabooses and related crew members. It also analyzes the overall growth of productivity in rail freight between 1983 and 1997 (using a translog rail cost function estimated over a sample of Class I railroads between 1983 and 1997). The results indicate that elimination of cabooses and associated crew members from freight trains reduced costs by 5–8% on the typical Class I railroad in 1997, equivalent to an annual cost saving of

The structure of railroad costs and the benefits/costs of mergers

2 billion to

Economies of Density and Regulatory Change in the U.S. Railroad Freight Industry

3.3 billion for all Class I railroads. Moreover, if Class I railroads had no other technological advances since 1983, their 1997 costs (with 1997 factor prices) would have been 36–43% higher than they in fact were. Finally, the results show that overall productivity growth in rail freight did not decelerate between 1983 and 1997; if anything, it accelerated slightly.

A Hedonic Cost Function Approach to Estimating Railroad Costs

Abstract This study examines the cost conditions present in the Class I railroad industry. Recent mergers and merger proposals have brought forth questions regarding the desirability of maintaining competition in areas impacted by horizontal mergers and, similarly, the desirability of end-to-end mergers. As we consider the costs and benefits of various merger oversight policies, it is imperative that we understand the welfare effects of such policies. One essential element of such welfare effects is the effects on costs within the industry. In examining the cost conditions in the industry, the study finds that railroads are natural monopolies over current networks. That is, duplicate networks serving the same railroad markets would result in increased industry costs. This suggests that maintaining competition in markets impacted by horizontal mergers is not justified by railroad cost considerations. In examining the potential cost effects of end-to-end mergers, the study finds evidence to suggest that Class I railroads are not natural monopolies as networks are expanded.

Intermodal traffic, regulatory change and carbon energy conservation in US freight transport

Two reform acts, the Staggers Railroad Act of 1980 and the Railroad Revitalization and Regulatory Reform Act of 1976, represented big changes in U.S. policy toward railroads. An important welfare gain from these changes predicted by researchers was the efficiency gain from increased densities in rail freight traffic. However, few retrospective studies have analyzed the accuracy of these predictions. The present paper fills this gap by analyzing the effects of regulatory changes on freight traffic density, through simulation of the cost savings from gains in density, using a newly estimated rail cost function, and by comparison of these results with earlier predictions. Our results indicate net benefits of

LONG-TERM AVAILABILITY OF RAILROAD SERVICES FOR U.S. AGRICULTURE

7–

Theodore Keeler’s impact on transportation economics and policy

10 billion per year (as of 2001), stemming from cost savings from increased traffic densities relative to what would have occurred under regulation. These benefits are substantially higher than those predicted by researchers in the 1970s and early 1980s, for reasons explained in the paper.

Airfares and Competition on International Routes

This study estimates a hedonic railroad cost function. It allows for differences in marginal costs across different outputs with different shipment characteristics. Cost and shipment data are included to examine the elasticity of costs with respect to two outputs - unit train output and way & through train output. We find differences across these two measures, which suggest the use of aggregate output measures may lead to significant bias in cost elasticities. Moreover, our approach also allows the effects of different shipment characteristics (e.g., shipment size, average length of haul) on marginal cost of each output to be considered.

Differential Effects of Rail Deregulation on US Grain Producers

Conserving transport carbon emissions is an important policy goal. Conventional wisdom often holds that conservation is best achieved by increased regulation, and that such gains are best achieved in passenger auto transport (fuel efficiency standards or diversion to transit). We argue that the growth of rail freight has conserved carbon fuel use in the United States, and that fuel-saving changes have been facilitated by reduced regulation since 1980. Methods used include estimation of translog cost functions (and related demand functions for fuel) for intermodal rail and for truck, allowing controlled comparisons of modal fuel use. We find intermodal rail (e.g. trailer on flatcar) to be a powerful conserver: if intermodal rail were eliminated, and traffic transferred to over-the-highway truck, extra annual carbon emissions would be nearly 25 Tg. By comparison, if urban passenger transit were eliminated and replaced by autos (according to one study) the extra annual emissions would be only 3.9 Tg.

Protecting the Captive Railroad Shipper

Future customer demands, service availability, and industry investment decisions will shape the modal marketing decisions of the grain-marketing sector. The Delphi technique is used to survey a cross section of grain-industry experts regarding future trends for the grain-marketing sector. The survey produces several interesting expectations, including further consolidation of the rail and elevator industries, increasing prominence of the heavy-axle cars in grain service, the upward trend in rail rates, increased use of market-based car-ordering systems and shuttles, expansion of the short-line rail network, and small market-scale, but large-volume, increases in the share of grain marketed via container. The insights are valuable in understanding the future of the rail grain industry. These expert opinions are important to identify research needs and discuss implications of government policy and market investment that affect the rail grain sector.