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1994•Rivista Internazionale de Economia dei TrasportiRequires access

ESTIMATING THE IMPACT OF DEREGULATION ON THE ELASTICITY OF THE DEMAND FOR RAILROAD SERVICES

Yu Hsing

Open publisher page 8 citations

Abstract

This paper examines potential changing trends of the elasticity of the demand for rail services since deregulation. The demand for rail services is specified as a function of its own rate, the rate for motor carriers, national output (GDP), the lagged dependent variable, and a dummy variable. The partial adjustment model is found not applicable to railroads. The price elasticity has been on the rise, the cross-price elasticity with respect to the truck rate has also increased, and the income elasticity has declined slightly. These findings suggest that since deregulation railroads have faced more competition and that growth in rail freights is slightly less than the growth in GDP. (A)

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What this paper is about

This paper examines potential changing trends of the elasticity of the demand for rail services since deregulation. The demand for rail services is specified as a function of its own rate, the rate for motor carriers, national output (GDP), the lagged dependent variable, and a dummy variable. The partial adjustment model is found not applicable to railroads. The price elasticity has been on the rise, the cross-price elasticity with respect to the truck rate has also increased, and the income elasticity has declined slightly. These findings suggest that since deregulation railroads have faced more competition and that growth in rail freights is slightly less than the growth in GDP. (A)

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Available abstract

This paper examines potential changing trends of the elasticity of the demand for rail services since deregulation. The demand for rail services is specified as a function of its own rate, the rate for motor carriers, national output (GDP), the lagged dependent variable, and a dummy variable. The partial adjustment model is found not applicable to railroads. The price elasticity has been on the rise, the cross-price elasticity with respect to the truck rate has also increased, and the income elasticity has declined slightly. These findings suggest that since deregulation railroads have faced more competition and that growth in rail freights is slightly less than the growth in GDP. (A)

Key concepts: Deregulation, Elasticity (physics), Price elasticity of demand, Economics, Income elasticity of demand, Truck, Cross elasticity of demand, Microeconomics

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