Professor Abouchar examines the freight schedules introduced on the brazilian railways in 1968. He concludes that they will be more inflationary than the old rates, leading to still larger deficits and to increasing demand in directions that will be harmful to national efficiency.
Topic: 2.2 Rail
This paper reports on the estimation of a cost function using pooled data for major US railroads for the period of 1974-86. Analysis is performed of short and long-run returns to scale, the extent of capital disequilibrium, and the adjustments to capital in the heavily regulated and quasi-regulated environments before and after the passage of the Staggers Act in 1980. It is found that there is considerable overcapitalisation in the rail industry and that this has persisted in spite of the Act.
This paper measures productivity growth in Irish railways for the period 1973-83, using a translog cost approach. Results show that there has been substantial growth in productivity, because of reductions in fleet size and labour and increases in traffic. Changes in freight handling were also shown to be significant.
Problems associated with subsidising Australian non-urban rail services are revisited by evaluating the macro-economic impacts of a policy that would eliminate railway deficits. The model used demonstrates how several policy scenarios for the abolition of railway subsidies can be explored by simulating shocks to the economy. The results illustrate the range of economic benefits that could accrue from the abolition of subsidies and identifies interests most likely to benefit or lose from such a policy.
The Tanzania-Zambia Railway (TAZARA) to Dar es Salaam faces competition from road transport and from railway lines to other ports. It is required to cover both capital and operating costs. The author assesses its performance and its prospects.
Ramsey Pricing of Inputs with Downstream Monopoly Power and Regulation. Implications for Railroad Rate Setting
The rules of Ramsey pricing should be adjusted where the regulated firm is not selling to consumers or to perfectly competitive industries. Some rail charges should be below Ramsey prices.
The author criticises the reference to Ramsey pricing in a recent decision by the Interstate Commerce Commission on charges for transport of coal. He finds that Ramsey pricing is suitable for public finance or for nationalised industries, but cannot be applied after deregulations.
Canadian railways have been left comparatively free to fix their charges and to meet competition from other modes. The system has worked well. It is now proposed to extend the powers of the Canadian transport Commission: the authors consider that changes should be confined to giving further emphasis to the national interest.
The short-term demand for rail freight transport is not price elastic; it depends chiefly on the quantity of a commodity produced and the quantity exported. The model gives encouraging results, but the author makes suggestions for further research. The study is based on Canadian data for the years 1958 to 1973.
British Rail, now largely freed from government regulation, bases its freight prices on the prices of its competitors and on quality of service. Costs are used to tell whether, and for how long, br can profitably accept traffic at market prices. Assets will be replaced only to the capacity which is justified by traffics which can bear their long-run marginal costs. In the Common Market countries road and rail are both subject to detailed government regulation of charges.