Abstract In the United States the railroads are the only intercity freight carriers that own the vehicles, routes and terminals that they use. Routes and terminals are natural monopolies and need regulation; the operation of vehicles is naturally competitive and, at most, needs antitrust. On this view, the operation of rail vehicles should be divested and deregulated; the routes and terminals need improved regulation. The present objective is to propose a method of regulating the tolls that would be charged by the route operators. The network would be partitioned into separately owned route segments. Each segment would be operated by a supplier of route services under a franchise bidding scheme. The unit of service would be a linear space on a track; this unit would equal the length of the train plus a safety interval, and it would move along the track at a standard speed. The heart of the proposal consists of a rule for pricing this space. A unit of route service is produced if and only if the revealed gain from exchange is nonnegative, and any unit produced is sold to that train operator who values it most. Price equals incremental cost, and a bidding scheme ensures that the subsidies will be such as either to yield normal profits in the long run or else to cause the route segment to be shut down.


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    Title :

    Economic evaluation for U.S. railroads


    Contributors:

    Published in:

    Publication date :

    1985-03-22


    Size :

    7 pages




    Type of media :

    Article (Journal)


    Type of material :

    Electronic Resource


    Language :

    English



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