The barge and rail freight market for export-bound grain movement from midwest to Mexican Gulf: an econometric analysis

An econometric model of the barge and rail freight market is developed so t hat factors which influence barge and rail rates for export-bound grain fro m Midwest to Mexican Gulf can be better understood. Three-stage least squar es method is used to estimate the system of four equations that constitute the model. A number of identified factors turned out to be significant in d etermining grains rail and barge transportation rates. Given the interactiv e nature of supply and demand processes it is difficult to pinpoint a singl e most important factor. Yet it is clear that a substitute nature of the tw o transportation modes in addition to direct price-quantity relationship de termine most of the transportation rates. (C) 2000 Elsevier Science Ltd. Al l rights reserved.