Kristen Monaco

Spatial price discrimination and the merger paradox

Abstract A familiar result in the literature on mergers is that the principal beneficiaries from such activity are the firms which are excluded from participation. The possible existence of this ‘merger paradox’ contrasts strongly with the frequently expressed view that merger is anti-competitive. This paper examines the question within the context of a model of spatial competition in which firms choose their locations in anticipation of forming a merger, and practise price-discrimination. We allow for differences in firms’ shares in the benefits of merger, and for the possibility that the firms will attach probabilities to merger formation.

ASSESSING THE DETERMINANTS OF SAFETY IN THE TRUCKING INDUSTRY

Using data from the 1997 survey of drivers conducted by the University of Michigan Trucking Industry Program, factors were identified which substantially affect three safety measures: accidents, moving violations, and hours of service violations. The variables used include both operational characteristics (firm size, trailer type) and personal characteristics (age, race, union status). Using both basic descriptive statistics and probit estimation, it was found that the variables that have the most impact on the three safety measures are operational in nature, not individual characteristics.

Ports and Highways Infrastructure: An Analysis of Intra- and Interstate Spillovers

U.S. ports serve a vital role in the nations supply chain and international trade. While the areas surrounding these ports bear the external costs of port expansion (congestion, air and noise pollution), neighboring regions feel the benefits and additional costs from port activity. Given the current debate over external costs from port activity, it is important to quantify the costs and benefits of ports on industry in the home state and neighboring states. This study assesses the role that transportation infrastructure plays in production and employment in the manufacturing industry. Using state-level data from the 48 contiguous states, the authors model manufacturing production and cost, incorporating state and local investment in port and highway infrastructure as variables. The authors find lower manufacturing costs in states with increased ports infrastructure. However manufacturing firms experience higher costs if a neighboring state increases its ports infrastructure, perhaps because productive resources (firms and workers) are drawn to states that increase ports infrastructure.

Spatial Price Discrimination and Merger: The N-Firm Case

The consequences of merger are analyzed in an N-firm model of spatial price discrimination. The merger occurs with known probability after location decisions have been made. The possibility of merger alters locations, generates inefficiency, and increases the profit of the merging firms. In the case of corner mergers, but never in the case of interior mergers, the possibility of merger may also reduce the profit of the excluded firms.

Does contracting with owner operators lead to worse safety outcomes for US motor carriers? Evidence from the Motor Carrier Management Information System.

Using data from the Motor Carrier Management Information System, we model crashes as a function of firm characteristics, with a focus on the employment relationship. We find that very small firms (one driver, one truck) and firms that contract with owner operators have fewer crashes than employee-only companies, once other firm characteristics and exposure are controlled. Additionally, though very small firms are more likely to have severe crashes, we find no relationship between the share of owner operators and crash severity.

Deregulation and wages in trucking: A time series phenomenon — A time series approach

The paper approaches measuring the wage effect of trucking deregulation from a new perspective using time series estimation techniques. The trucking wage is modeled as a function of the manufacturing wage and the relationship between these series is measured over time. The wage premium of trucking over manufacturing was found to be deterministic over time with two structural breaks in May 1980 and June 1984. This suggests that deregulations effect on the trucking wage was mainly felt between 1980 and 1984. Using the relationship between the trucking wage and manufacturing wage before deregulation, it was determined that the initial effect of deregulation was to decrease wages 6.99%. This wage effect increased at a decreasing rate over time and by 1995 the cumulative effect was 12.43%.

Examining Industry Effects for Truck Drivers

Disaggregating truck drivers by industrialclassification, rather than using a private carriagefor hire distinction, a significant wage gap isfound between drivers in trucking services and driversin all other industries. The premium for drivers intrucking services is largest relative to drivers inwholesale and retail trade and agriculture, who aremost likely to be true private carriage drivers. Drivers in construction and mining, less likely tomeet the true definition of private carriage, havesmaller wage disadvantages. This suggests that thewage gap between for-hire and private carriage driversmay be underestimated in other research.

Banking Employment in the 1990s: Regional Effects of Consolidation

The effects of consolidation in the banking sector on employment are analyzed using data from the Federal Deposit Insurance Corporations Statistics on Banking. Previous efficiency studies of consolidation find that there is no relationship between consolidation and non-interest expenses (a proxy for employment). This study finds a negative relationship between consolidation and employment. It also finds no positive employment effects in states that were net beneficiaries of the savings and loan (S&L) bailout.