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

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Our estimates should be viewed, therefore, as first approximations, as
the best that can be achieved at the present time, but as only frag-
mentary evidence of what may be found when a thorough, detailed analysis
of the transport market becomes possible. We hope that our theoretical
development, the specification of the variables which must be considered,
will assist and encourage the gathering of more complete and compre-
hensive data. We shall first discuss the reduced form parameter es-
timates and then comment upon the derived sensitivity ratios.
Table 4.49 contains our final parameter estimates for the quantity
equations. Although the overall fit of the equations is not overly im-
pressive it should be noted that all'of the equation F values are sig-
nificant and approximately half of the R 2 values are of respectable
size. Since the dummy variable was set up to assume a value of one for
distances less than two hundred miles and zero for greater distances,
the assumption of motor transport being dominant .for the shorter ship-
ments with rail becoming competitive only after several hundred miles
yields the expectation that this coefficient would display a negative
sign for rail and a positive sign for motor transport. This expecta-
tion is realized for only one of the commodity groups. Group 26, Pulp,
Paper and Allied Products, yielded the expected results. For the other
commodity groups all coefficients were positive. This implies that,
for the shipments covered by our data at least, all modes of transport
share in the short hauls.
Five of the nine estimated intercept terms turned out negative.
For the usual demand equation this would be a disastrous result. How
ever, it is rather to be expected in our reduced form equations. A
glance at these equations, (4.51)' and (4.52), reveals that each intercept
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