Date of this Version
Thesis (M.S.)—University of Nebraska—Lincoln, 1970. Department of Agricultural Economics.
The primary objectives of this study are:a) to develop a technique for measuring place discrimination; b) to employ the technique in testing empirical data for evidence of discrimination; and c) to analyze the results and explore implications for geographically-separated wheat shippers.The study focuses on Nebraska and Great Plains shippers and is designed to determine whether shippers in this state and this area are discriminated against relative to shippers in other locations.
Western Trunk Line (roughly the Midwest) is often the territory discriminated against.Revenue/out-of-pocket cost ratios for wheat shipments within this territory are among the highest rates encountered.
Much of the discrimination appears to be related to intermodal competition or the lack thereof.Longer hauls, for example, tend to be discriminated against relative to shorter hauls.Covered hopper car shipments are generally discriminated against compared to boxcar traffic moving under similar circumstances.States in the Northern Great Plains are discriminated against relative to other wheat producing states.The discrimination increases as one moves from south to north through the tier of Great Plains states. Intrastate wheat shipments are in general more disadvantaged than interstate movement.Western Nebraska shippers tend to be discriminated against relative to those in Eastern Nebraska for wheat hauled to major terminal markets at Omaha and Kansas City.
Only a few changes have been noted between 1958 and 1966 results.While the overall level of discrimination was a bit lower in 1966 than in 1958, the same general pattern emerged.Thus, place discrimination tends to be persistent; it appears to be a long-term phenomenon.The potential for long-run misallocation of resources appears to be present.
In summary, discrimination in the rail rate structure for wheat does exist.Much of the discrimination appears to be a response to competitive conditions – to the presence or absence of intermodal competition.Other variations in revenue/cost relationships are more difficult to explain.Variations may be due to happenstance or to the pulling and hauling between regulatory agencies and carriers.For whatever the reasons, discrimination, in an economic sense, is very much in evidence.There is further evidence that it is more than just a short-run happenstance situation.
Advisor: Dale G. Anderson