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

statistical, and in addition, does not require the assumption of long-
run er,uilibrium necessary to statistical estimations of long-run costs.
Production functions based on technological data more closely approach
the long-run production functions of economic theory than do statisti-
cal estimations based solely on observed behavior. It is unfortunate,
therefore, that similar technological information has not been success-
f11 , 1 ,, Qmpl,wed f.q- thki other cost components of train (1.,)cratinns.
Co:.t.b of Linchaul Process. Aside from depreciation and interest,
the primary components of linehaul costs are crew wages and fuel ex-
penses. Others such as lubricants and water are so small as to be
safely ignored. 21 In order to determine the train's cost curves,
methods of estimating the individual cost components must be developed.
A typical freight train crew consists of an engineer, a conductor,
and two brakemen. 22 The rate at which crew members are paid is based
upon the distance traveled. Time is converted into distance by the
assumption of an average freight-train speed of 12.5 miles per hour.
Therefore, än 8-hour period is equivalent to a 100-mile trip. For
purposes , of determining the crew cost of a trip, the first 100 miles
is charged at one rate and the remaining miles at another, lower rate.
These mileage rates are effectively independent of the actual trip
time involved. If, however, the train actually attains an average
speed for the trip of less than 12.5 miles per hour, then "overtime"
is paid on the basis of the miles that could have been traveled at a
speed of 12.5 miles per hour. Thus, if a 125-mile trip which "should"
have taken 10 hours, actually takes 12 hours, then it is equivalent
to a 150-mile trip for crew-wage purposes. The additional 25 miles
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