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

(4.11)
(4.12)
(4.13)
(4.14)
111 Tc
1
c c
T ■ T 2
T c ■ T 3
q q l q 2 q 3
Equilibrium conditions
The following definitions continue to apply:
d E quantity of transport demanded;
c _
T = total costs, to the shipper, of transportation;
T c i = total costs of shipping by Mode i, (i ■ 1, 2, 3);
E quantity transported by Mode 1, (i ■ 1, 2, 3);
r _
Ti = transport rate, per ton, charged by Mode i, (1 ■ 1, 2, 3);
T a = other shipping costs, borne by the shipper, associated
i
with shipping by Mode 1, (i ■ 1, 2, 3).
Now, the theoretical model has been developed for the case where
one specific market ships to only one other market. However, data to
fit such a model are unavailable at the present time. Any estimation
attempts must utilize data of a cross-sectional nature, i.e., shipments
between many pairs of markets during the same time period. To use data
of this type it is necessary to add several new variables to the struc-
tural equations which explicitly allow for the differences in market
size and the distances between the markets. We define
A E an indicator of the economic size of a city (0-D) pair,
and
M E the distance, in miles, between a city pair.
The size indicator, A, is inserted in equation (4.1) as an ex-
ogenous variable and the distance variable, M, is included in equations
(4.2) through (4.7) in a like manner.
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