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

and frequency of equipment maintenance); differences in the type of
commodity carried; and differences in equipment used. Due to the
varied circumstances it is difficult to draw definite conclusions
from the firm dummy variable coefficients. For example, company .
three, with the largest positive (and significant) coefficient is a
specialized company dealing with common carriage almost exclusively,
and operates to a great eXtent on some of the more restrictive water-
ways. Company four, on the other hand, is one of the largest firms
in the industry, carries almost exclusively bulk commodities and has
several unit tow operations. One would expect its cost to be generally
lower than the other firms.
Finally, the coefficient of log10 EBM is negative, indicating an
inverse relationship between total output and average cost. Viewing
the towboat as a firm once again, the relationship between EBM's and
Cost per EBM can be characterized as short-run cost. Holding horse-
power (firm size) constant and varying EBM's a family of short run
curves can be derived. •
At the point of means the average cost of an EBM is $1.578. A
more intuitive feel for this figure can.be gained by recalling the
definition of an EBM: An EBM is the movement of a fully loaded barge
for one mile under given physical operating conditions. A fully loaded
barge will weigh about 1400 tons. Thus, an EBM, ignoring its special
physical characteristics is approximately equal to 1400'ton7miles.
Meyer reports the total average cost of a ton-mile in the 'barge indus-
•
try to be about two to two and one-half mills. 3 This is a cost per
1400 ton-miles of $2.80 to $3.50. No indication is given in the Meyer
82