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

cargo, the excluded category. The average cost of shipping coal, in
particular is considerably lower than the cost of general cargo. For
example, increasing coal shipments by one percentage point, costs per
EBM would fall, at all levels of output, by 2.4%. At typical output
levels for this firm, a 2.4% average cost reduction would reduce
total cost by over $15,000 per month.
The coefficients for the river district percentages show a
wide range of values. Unfortunately, the coefficients do not show
significant statistical differences from the omitted river district
(the Lower Mississippi). The coefficients for S. Louis to Grafton,
and Cairo to Cincinnati however, are significant for a one-tailed
t-test at the .95 level of probability. Economically, however, the
coefficients indicate that large cost differentials may exist between
..
operations on different river districts. A one percentage point
increase, for ,example, of traffic in the Port of Chicago would
increase average cost by more than 4% at all output levels.
Indirect Costs
Indirect costs represent the portion of total cost which
cannot directly be assigned to particular outputs. These are
the costs primarily associated with the scheduling of equipment
and the sale of services. The estimates can serve two purposes.
First, it may be possible to associate variations in indirect cost
with variations in particular services offered. Secondly, the
estimates could be used to supplement the other statistical '
estimates of direct cost (both direct barge and direct terminal)
to arrive at a measure of total firm cost. The estimates could
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