The Staggers Rail Act of 1980 provided American railroads with almost
complete relief from rate regulation. Regulatory reforms resulted in r
apid and pronounced changes in firm behavior and an eventual reconfigu
ration of the industry as a whole. This investigation provides a highl
y disaggregated study of deregulated rail rates for seventeen commodit
ies. The results indicate that the Staggers Act fundamentally altered
the way in which rail carriers price their services. As importantly, t
he results suggest that shippers have responded to altered railroad be
havior by changing the characteristics of their shipments. Together, t
he changes in railroad behavior and shipper responses to these variati
ons have produced lower railroad rates for a small but measurable numb
er of movements across a wide range of commodities.