Returns to scale and market concentration among the largest survivors of deregulation in the US trucking industry

James Giordano

Applied Economics, 1997, vol. 29, issue 1, 101-110

Abstract: Application of the survivor technique to the 100 largest less-than-truckload carriers of general commodity freight in the US interstate trucking industry produces estimates of the ranges of increasing, constant, and decreasing returns to scale. From 1981 to 1993, the first thirteen years of deregulation, nearly one-quarter of total group ton-miles hauled is found to have moved into the more efficient size range of constant returns to scale. A gain in long-run technical efficiency is thereby attributed to the Motor Carrier Act of 1980. Moreover, the survivorship data allow estimates of intragroup market concentration for each of the same thirteen post-deregulation years. Concentration purely within this group appears to have remained fairly moderate and stable since 1981, an unsurprising finding given the modest minimum efficient size estimated at about 2 million ton-miles hauled annually. The moderate and stable concentration among the 100 largest is not necessarily incompatible with other research which finds growing overall industry concentration since MCA80. It does, however, imply a lack of market dominance and latent oligopoly.

Date: 1997
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DOI: 10.1080/000368497327452

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