Premium
THE IMPACT OF DEREGULATION ON THE PRODUCTION STRUCTURE OF THE MOTOR CARRIER INDUSTRY
Author(s) -
McMullen B. Starr,
Stanley Linda R.
Publication year - 1988
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1988.tb01495.x
Subject(s) - deregulation , motor carrier , economics , commodity , production (economics) , production cost , industrial organization , cost structure , empirical research , market structure , microeconomics , econometrics , monetary economics , macroeconomics , market economy , engineering , statistics , mechanical engineering , truck , aerospace engineering , mathematics
Empirical analysis of the motor carrier industry pre‐ and post‐regulatory reform reveals that deregulation resulted in significant changes in firm production structure and lower real average costs. Translog cost functions for firms operating in 1977 and 1983 were estimated and compared for “other specialized commodity” carriers. Fitted average costs were computed from these functions. The results indicate significant differences in the cost functions and real costs that cannot be attributed to technological changes but rather suggest efficiency gains. The results also suggest that it is inappropriate to predict outcomes of deregulation using empirical analyses of firms in the regulated environment.