Against the Stand-Alone-Cost Test in U.S. Freight Rail Regulation

Russell Pittman

No 201001CA, EAG Competition Advocacy Papers from Department of Justice, Antitrust Division

Abstract: The stand-alone-cost test has become an expensive, extensive, and time-consuming part of the regulatory practice of the U.S. Surface Transportation Board in the performance of its statutory duty to protect "captive shippers" from monopoly rail rates. Worse, a close examination of the history of its adoption and application suggests only a very tenuous connection with its claimed intellectual foundations, the classic works of Faulhaber (1975) and Baumol, Panzar, and Willig (1982). It is time to retire this tool and replace it with something simpler and more effective and transparent.

Pages: 16 pages
Date: 2010-04
New Economics Papers: this item is included in nep-his and nep-reg
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Citations: View citations in EconPapers (7)

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Related works:
Journal Article: Against the stand-alone-cost test in U.S. freight rail regulation (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:doj:compad:201001

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