EXPENSE PREFERENCE BEHAVIOR IN TRUCKING - AN EMPIRICAL NOTE

This note offers a statistical model which points out that the goal of publicly regulated firms often deviates from profit-maximization. Usi ng a large firm-level panel data set from the trucking industry, we of fer estimates which suggest that firm managers of the more heavily reg ulated common carriers practice utility maximization through higher sa laries and more lucrative benefits than the managers (CEOs) of less re gulated contract carriers. Our results add to the body of empirical wo rk which supplements the theory of the firm developed by Ronald Coase.