Profit and productivity of US Class I railroads

Siew Hoon Lim and C.A. Knox Lovell
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Siew Hoon Lim: Department of Agribusiness and Applied Economics, North Dakota State University, Fargo, North Dakota, USA, Postal: Department of Agribusiness and Applied Economics, North Dakota State University, Fargo, North Dakota, USA

Managerial and Decision Economics, 2009, vol. 30, issue 7, pages 423-442

Abstract: This paper examines how productivity changes and price changes have contributed to short-run profit change in the railroad industry. Using an unbalanced panel of US Class I railroads for the period 1996-2003, a short-run profit change decomposition model is used to attribute intertemporal profit change to its causal factors. We find that productivity improvements and an increased scale of production contributed to increases in profit, and that variation in operating efficiency had a mixed impact on profit. We also find that relative changes in rail rates and variable input prices exerted downward pressure on profit. Copyright © 2009 John Wiley & Sons, Ltd.

Date: 2009

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Persistent link: http://EconPapers.repec.org/RePEc:wly:mgtdec:v:30:y:2009:i:7:p:423-442

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