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Author: | Schmidt, S. |
Title: | Market structure and market outcomes in deregulated rail freight markets |
Journal: | International Journal of Industrial Organization
2001 : JAN, VOL. 19:1-2, p. 99-131 |
Index terms: | MARKET STRUCTURE RAIL TRANSPORT MERGERS DEREGULATION |
Language: | eng |
Abstract: | Using cross-section data on a national sample of city-pair markets for rail freight, the author examine correlations between prices, quantities, and the number of single-line and interline firms serving markets. The author estimate the reduced form of a structural model in which rail rates and quantities depend on the number of firms. The author find that rates increase as the number of firms serving the market falls, and quantities shipped rise as the number of firms falls. The result is consistent with market power for rail freight shippers that causes markups to rise when fewer firms serve the market, and is not consistent with other explanations of the relationship between number of firms and rates and quantities. Interline shipment is much more and rates and quantities. Interline shipment is much more desirable even if they exacerbate market power problems. |
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