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

to the mode under consideration, cross demand effects were not explicitly
taken into account.
Benishay and Whitaker begin with the basic, two-market spatial com-
petition model and suggest that the logic of this model can be extended
to cover the case of many commodities and regions. This is a correct
view as Takayama and Judge have shown that a multi-commodity, multi-
region spatial competition model can be solved through the use of quad-
ratic programming techniques. The possibility of this extension, how-
ever, does not justify, as Benishay and Whitaker apparently believe,
the derivation of transportation demand functions by mode that aggregate
all commodities and regions.
Another assumption underlying their empirical investigations ap-
pears questionable. They assert that the price elasticity of total
transportation demand is probably zero in the short run, where the short
run is defined as that period of time within which locational adjust-
,ments to across-the-board transportation price changes do not occur.
This statement does not appear to be justified. If product demand and
supply curves display their usual forms, the derived demand for trans-
portation will slope downward more sharply than the demand curve for
the product, but will seldom be a vertical line.
Equations of the following sort were estimated for each of the
three modei.
(2.3)
where
T t ■ b 0 + b l P t + b 2 I t + b 3 U t + b 4 Y t