ESTIMATION OF MODAL DEMAND ELASTICITIES IN GRAIN TRANSPORTATION

Recent legislation in the transportation industry has stimulated a move toward more flexibility in railroad pricing and has consequently provided the impetus for the analysis of transportation demand. Modal demands for grain transportation are analyzed in this paper using a derived demand approach assuming dual relationships between production and cost functions of shippers' distribution activities. Hypotheses were introduced in the empirical specification about the effects of rail car shortages and the introduction of multiple-car rail rates. The model was estimated and hypotheses tested in the case of eastbound wheat and barley shipments form North Dakota.