The Costs of Railroad Regulation: A Further Analysis

The Staggers Act of 1980 largely ended almost a century of government regulation of railroads. This paper presents evidence that deregulation has had a positive impact on the economy. Specifically, deregulation has generated billions of dollars worth of efficiency gains, contrary to the relatively modest gains estimated by Boyer (I987). In performing the analysis the paper examines several aspects of railroad deregulation, and uses a reduced form econometric model to measure the effect of deregulation on rail rates.