Using spatial equilibrium models to analyze transportation rates: an application to steam coal in the United States

This paper uses the implications of Samuelson's spatial equilibrium model t o analyze transportation rates for steam coal delivered to electric utiliti es in the United States. The analysis indicates that transportation rates d eclined in every year but two since railroads were substantially deregulate d in 1980. While some utilities may have experienced some rate increases, c oal-fired electric utilities as a whole have clearly benefited from lower t ransportation rates, and economic welfare has increased. The methodology in this study may be used in other instances where reliable data on transport ation rates are not available, but data on delivered prices are available. (C) 1999 Elsevier Science Ltd. All rights reserved.