Allocation in Surface Freight Transportation: Does Rate Regulation Matter?

This paper reexamines a familiar problem in the literature of transportation economics: the impact of ICC rate regulation on the allocation of surface freight traffic among competing modes. A multinomial logit model is used to estimate the division of traffic manufactured commodities among truck, rail boxcar, and piggyback. The extent of misallocation attributable to regulatory rate distortion is found to be substantially less than reported in previous studies.

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