Estimating the Demand for Truck and Rail Transportation: A Case Study of California Lettuce

Abstract

IN THE PAST, research in transportation economics mainly focused on supply. Despite the almost universal adoption of demandoriented pricing by transportation industries and regulatory bodies, demand received relatively little attention. However, the apparent neglect of demand is being remedied. This is evidenced by two recent studies on demand for transportation services, one by Perle and one by Benishay and Whitaker,1 Interest in demand is timely because of expanding transport opportunities provided by intermodal competition as well as increasing use of private carriers. As a result, the traditional use of the value of the commodity (alone or in conjunction with transport cost as a percentage of the price of the commodity at destination) as an indicator of the elasticity of demand for transport is increasingly less reliable. The main differences between the studies cited above and the one reported in this paper are in the level of aggregation and the nature of the data. Both of the above studies dealt with the demand for transport services at national or regional levels and utilized time series data. For many purposes, however, knowledge of demand at a much less aggregated level is necessary. This study follows a n earlier one by Limmer. 2 It examines further the possibility of estimating demand for truck and rail trans-