Abstract
The Staggers Rail Act of 1980 provided American railroads with almost complete relief from rate regulation. Regulatory reforms resulted in rapid and pronounced changes in firm behavior and an eventual reconfiguration of the industry as a whole. This investigation provides a highly disaggregated study of deregulated rail rates for seventeen commodities. The results indicate that the Staggers Act fundamentally altered the way in which rail carriers price their services. As importantly, the results suggest that shippers have responded to altered railroad behavior by changing the characteristics of their shipments. Together, the changes in railroad behavior and shipper responses to these variations have produced lower railroad rates for a small but measurable number of movements across a wide range of commodities.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Atkinson, Scott E., and Joe Kerkvliet; 1986. “Measuring the Multilateral Allocation of Rents: Wyoming Low-Sulfur Coal.”Rand Journal of Economics 3(17): 416–430.
Association of American Railroads. 1975–1984.CS-45 Records. Washington, D.C.
Association of American Railroads. 1974–1987.Yearbook of Railroad Facts. Washington, D.C.
Barnekov, Christopher C., and Andrew N. Kleit; 1990. “The Efficiency Effects of Railroad Deregulation in the United States.”International Journal of Transport Economics 17(1): 21–36.
Boyer, Kenneth. 1987. “The Costs of Price Regulation: Lessons from Railroad Deregulation.”Rand Journal of Economics and Management Science 18(3): 408–416.
Blair, Roger D., and David L. Kaserman; 1985.Antitrust Economics. Homewood, Illinois: Irwin, Inc.
Braeutigam, Ronald R., Andrew F. Daugherty, and Mark A. Turnquist; 1984. “A Firm-Specific Analysis of Economies of Density in the U.S. Railroad Industry.”Journal of Industrial Economics 33(1): 408–416.
Bresnehan, Timothy F., and Peter C. Reiss; 1991. “Entry and Competition in Concentrated Markets.”Journal of Political Economy 99(5): 977–1009.
Burton, Mark L. 1991. “Railroad Deregulation and Rail Rates: A Disaggregated Analysis,” University of Tennessee: Unpublished doctoral dissertation.
Grimm, Curtis M., and Robert G. Harris; 1988. “A Qualitative Choice Analysis of Rail Routings: Implications for Vertical Foreclosure and Competition Policy.”Logistics and Transportation Review 2401: 49–67.
Garrod, Peter V., and Walter Miklius; 1987. “Captive Shippers' and the Success of Railroads in Capturing Monopoly Rent.”Journal of Law and Economics 30(2): 423–433.
Hsing, Yu, and Hui Chang; 1980. “Demand for Faculty of Public Higher Education in the Southeast: A Cross-Sectionally Correlated and Time-Wise Autoregressive Model. ” Proceedings of the American Statistical Association, Business and Economics Statistics Section.
Interstate Commerce Commission 1984.Report on Rail Contract Rates. Washington, D. C.
Interstate Commerce Commission 1987.Contract Rate Competitive Impact Report-Grain Shippers. Washington, D. C.
Kmenta, Jan 1986.Elements of Econometrics. New York: McMillan Publishing Co.
Levin, Richard 1981. “Railroad Rates, Profitability and Welfare Under Deregulation.”Bell Journal of Economics and Management Science 12(1): 1–26. Levin, Richard 1981. “Railroad Regulation, Deregulation and Workable Competition.”American Economic Review 71(2): 394–404.
MacDonald, James M. 1987. “Competition and Rail Rates for the Shipment of Corn, Soybeans, and Wheat.”Rand Journal of Economics 18(1): 151–163.
MacDonald, James M. 1989. “Railroad Deregulation, Innovation, and Competitive Effects of the Staggers Act on Grain Transportation.”Journal of Law and Economics 32(1): 63–96.
MacDonald, James M. 1989.Effects of Railroad Deregulation on Grain Transportation. U.S. Department of Agriculture, Technical Bulletin No. 1759.
MacDonald, James M., and Linda C. Cavalluzzo; 1990. “The Effects of Railroad Deregulation on Rail Labor.” Working Paper, Rensselaer Polytechnic Institute, Troy, New York.
McFarland, Henry 1987. “The Economics of Vertical Restraints and Relationships Between Connecting Railroads.”Logistics and Transportation Review 23(2): 207–221.
McFarland, Henry 1987. “Did Railroad Deregulation Lead to Monopoly Pricing? An Application of ’q’.”Journal of Business 60(3): 385–400.
McFarland, Henry 1989. “The Effects of United States Railroad Deregulation on Shippers, Labor, and Capital.”Journal of Regulatory Economics 1:(3): 259–270.
Stigler, George 1971. “The Theory of Economic Regulation,”Bell Journal of Economics and Management Science 2(1): 3–21.
Winston, Clifford 1979. “A Disaggregated Qualitative Mode Choice Model for Intercity Freight Transportation.” Working Paper No. SL-7904, Department of Economics, University of California — Berkeley.
Winston, Clifford 1985. “Conceptual Developments in the Economics of Transportation: An Interpretive Survey.”Journal of Economic Literature 23(1): 57–94.
Winston, Clifford, Thomas M. Corsi, Curtis M. Grimm, and Carol A. Evans; 1990.The Economic Effects of Surface Freight Deregulation. Washington, D.C: Brookings Institute.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Burton, M.L. Railroad deregulation, carrier behavior, and shipper response: A disaggregated analysis. J Regul Econ 5, 417–434 (1993). https://doi.org/10.1007/BF01065406
Issue Date:
DOI: https://doi.org/10.1007/BF01065406