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

Form C weights have limited accuracy. One would expect, for example,
that operating conditions are not the same for the Tennessee River and
the Gulf of Mexico, yet both have a weight of .7. The factors are in-
cluded merely as a rough check on the tendencies shown by the river
district coefficients.
In looking at the river district coefficients, there is only one
that is quite surprising. That is the coefficient shown for the Lower
Mississippi. Since the Lower Mississippi is probably the least restric-
tive of all river districts and contains no locks, one would expect it
to have a relatively large, negative coefficient. Other than the coef-
ficient for the Lower Mississippi, the relative magnitudes of the river
district coefficients appear reasonable.
It is worth noting that, although individually some of the coef-
ficients are not significant, nevertheless they are significant as a
group (see Table 10). In addition, from an economic standpoint, most
of the river district coefficients are significant relative to average
cost. For example, by increasing operations on the Central Ohio
(Cincinnati to Dam 23) 10 percentage points (reducing operations by
a like amount on the Lower Illinois) average cost will fall by 4% at
all levels of output. Taking, once,again, $300,000 as the representa-
tive annual total cost, this change would increase total cost by $12,000.
That the results show significant differences existing between
firms is no surprise. One would expect the cost to Vary due to region-
al differences in wage contracts and other prices; differences in typical
operating conditions (river districts where the firm is licensed to
operate, rules concerning how deeply to load barges, flotilla make-up,
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