Q2 Z2,(Q2) Z2(Q2) - Institute for Water Resources - U.S. Army

(4.41) Rik ■ 0 30 + 0 31 Mik + 0 32 Qik + 0 33 Dk
+ e 3ik
(4.42) R.. ■ 8 40 4. 8 41 Mik 8 42 Qik 4. 8 43 Dk 4. 8 44 Pk e4ik
where
R ik 3 average revenue received, in cents per ton, for
transporting the ith shipment of commodity class k;
M ik = distance, in miles, of the i th shipment of commodity k;
Q ik tons carried in the i th shipment of commodity k;
D k 3 the density, in average tons per car, of the k th
commodity class;
P k
the average wholesale price, in dollars per ton,
of the ktn-commodity class;
th
Omn 3 the n- coefficient to be estimated in the mth
equation; and
e lik = the disturbance terms, (1 ■ 1, 2, 3).
Table 4.13 contains the estimated coefficients and an analysis of
variance table. We note first of all that all of the coefficients are
significantly different from zero. The distance coefficients are posi-
tive and quite robust. Each 100-mile increase in distance will increase
the water rate by about thirty cents. Later, we will compare these
coefficients with the rail coefficients.
The quantity coefficients are negative as expected and quite sig-
nificant. The greater the amount shipped at any one time, the less is
the rate per ton. The density coefficient also appears negative and
highly significant. Its effect is by far the largest of any examined
here. A one hundred ton increase in the density variable would lower
the water rate by perhaps $3.00.
The price coefficient is very interesting. Its value is relatively
small but it is positive and highly significant. Value of service rate
106