Labor and industrial organization topics in transportation economics: Wages and deregulation, spatial demand and competition, and intermodal rates

This dissertation is a series of three essays examining topics in transportation economics. The first essay analyzes the effects of the deregulation of the motor carrier industry on compensation by union status. In contrast to previous studies, I find evidence that compensation premiums for surviving unionized firms who were able to compete in the deregulated environment have increased. However, since deregulation, there has been a major exodus of union firms; thus, while union compensation has not been seriously affected by deregulation and compensation premiums have increased, the number employed in the unionized sector has fallen and fallen dramatically. In my second essay, I develop and estimate a model of spatial competition between grain elevators located on the Upper Mississippi and Illinois Rivers. Using a variety of both parametric and nonparametric methods, I uncover structural breaks in the data along the geography of the network. In addition, given that shippers compete spatially, I estimate a model which incorporates spatial autocorrelations with competing elevators. The results suggest that demand elasticities vary across the spatial environment and that the presence of competitors has a sizable impact on the structure of demand. These results are of central importance to policy-makers as they call into question the assumptions made by models currently in use for measuring the benefits of inland waterway improvements, and yet, provide estimates that are easily adapted to the models used to measure these benefits. In the third and final essay, I examine railroad pricing over space. In particular, I examine how railroad rates differ in the presence of competition from other railroads, competition from other modes of transportation and competition from local users of the commodity being hauled. Using a model of market dominance, the results provide strong evidence that railroads decrease the rates that they charge to ship corn to the Northwest and to the Gulf Coast as the threat of competition from barge transportation increases and as the area production of ethanol, a local user of corn, increases.