Spatial competition and geographic grain transportation demand on the Mississippi and Illinois rivers

Using a model of spatial competition between grain elevators, I estimate a model of transportation demand for grain elevators located along the Mississippi and Illinois rivers. This analysis uses a unique set of interview data collected by the Tennessee Valley Authority (TVA). Both the theory and the data suggest that there are geographic patterns in barge demand elasticity-patterns which are empirically uncovered using an endogenous switch point model. These results are of central importance to policy-makers as they call into question assumptions made by the models currently used for measuring the benefits of inland waterway improvements.