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

competition, that is where the quality is improved but rates remain
constant and thus do not reflect the higher quality service.
Speed was the only quality variable that the authors felt they
could quantify in a meaningful way. To ascertain if the modes vary the
speed of their service in response to demand conditions they constructed
average speed variables for both rail and motor transport. The figure
for rail was derived from ICC data by dividing train-miles by train-
hours to give a mile-per-hour figure. The motor averages were derived
from highway checks of actual truck operating speeds. These averages
were each regressed on the Index of Industrial Production and a time
trend. These fits were poor so the averages were not included in the
demand equations • 12
Benishay and Whitaker present the results of nine separate re-
gressions. For each of three modes they use (1) the actual values of
'the variables, (2) logarithms of the values, and (3) the first differ-
ence of the logarithmic values. Overall the results were quite good
and yielded parameter estimates which were in accord with their ex-'
pectations. The price coefficients in the rail and motor equations
were with one exception all of negative sign and highly significant.
The price coefficients for water transport were negative in two of the
three cases but never significant.
The income coefficients all displayed positive signs and were all
significant except for the motor first difference equation. This
12. This -was a rather strange test. These regressions showed the
correlations between speed and both the Index of Industrial Production
and time to be low. Thus, to include the speed variables in the demand '
regressions would have caused no problems. The "tests" revealed little
concerning the effects of speed on tons shipped whereas the later inclusion
of the speed variables could have.
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