IDEAS home Printed from https://ideas.repec.org/a/eee/retrec/v6y2001i1p25-54.html
   My bibliography  Save this article

Measuring technological change in the U.S. motor carrier industry

Author

Listed:
  • Wong, Lawrence

Abstract

This paper re-examines the impact of deregulation and technological change on U.S. motor carrier costs for the period 1976-1987. A truncated, third-order translog cost function, developed by Stevenson (1980) allows us to decompose technological change into three components: input bias, output bias, and characteristics bias. We examine the source of these biases and use the model to test the Schumpeter hypothesis, which asserts that large firms innovate at a faster rate than small firms. We show that technological change has been labor-saving and purchased capital-using, and that these input biases were induced by changes in output level. The increase in the capital cost share and the decrease in fuel cost share are attributed to deregulation. Over time, the LTL sector of the motor carrier industry has become more capital intensive, resulting in even higher entry barriers. The output bias of technological change on the representative firm is not significant and our results do not support the Schumpeter hypothesis in the LTL sector of the motor carrier industry. Technological change has increased the economies of larger shipment size over time, but has not significantly altered the impact of average load, average length of haul, or insurance per ton-mile on costs over time. Also we find that deregulation, through its negative impact on technological change, has resulted in higher industry costs.

Suggested Citation

  • Wong, Lawrence, 2001. "Measuring technological change in the U.S. motor carrier industry," Research in Transportation Economics, Elsevier, vol. 6(1), pages 25-54, January.
    • Handle: RePEc:eee:retrec:v:6:y:2001:i:1:p:25-54
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0739-8859(01)80005-6
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Daniel, Timothy P & Kleit, Andrew N, 1995. "Disentangling Regulatory Policy: The Effects of State Regulations on Trucking Rates," Journal of Regulatory Economics, Springer, vol. 8(3), pages 267-284, November.
    2. Binswanger, Hans P, 1974. "The Measurement of Technical Change Biases with Many Factors of Production," American Economic Review, American Economic Association, vol. 64(6), pages 964-976, December.
    3. John S. Ying & Theodore E. Keeler, 1991. "Pricing in a Deregulated Environment: The Motor Carrier Experience," RAND Journal of Economics, The RAND Corporation, vol. 22(2), pages 264-273, Summer.
    4. Binswanger, Hans P, 1974. "A Microeconomic Approach to Induced Innovation," Economic Journal, Royal Economic Society, vol. 84(336), pages 940-958, December.
    5. Ying, John S, 1990. "The Inefficiency of Regulating a Competitive Industry: Productivity Gains in Trucking Following Reform," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 191-201, May.
    6. Blackorby, Charles & Lovell, C A Knox & Thursby, Marie C, 1976. "Extended Hicks Neutral Technical Change," Economic Journal, Royal Economic Society, vol. 86(344), pages 845-852, December.
    7. Moore, Thomas Gale, 1978. "The Beneficiaries of Trucking Regulation," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 327-343, October.
    8. Keeler, Theodore E, 1986. "Public Policy and Productivity in the Trucking Industry: Some Evidence on the Effects of Highway Investments, Deregulation, and the 55 MPH Speed Limit," American Economic Review, American Economic Association, vol. 76(2), pages 153-158, May.
    9. Wales, Terence J., 1977. "On the flexibility of flexible functional forms : An empirical approach," Journal of Econometrics, Elsevier, vol. 5(2), pages 183-193, March.
    10. Winston, Clifford, 1985. "Conceptual Development in the Economics of Transportation: An Interpretive Survey," Journal of Economic Literature, American Economic Association, vol. 23(1), pages 57-94, March.
    11. Wang Chiang, S Judy & Friedlaender, Ann F, 1984. "Output Aggregation, Network Effects, and the Measurement of Trucking Technology," The Review of Economics and Statistics, MIT Press, vol. 66(2), pages 267-276, May.
    12. Rolf Fare & Shawna Grosskopf & Wen-Fu Lee, 2001. "Productivity and technical change: the case of Taiwan," Applied Economics, Taylor & Francis Journals, vol. 33(15), pages 1911-1925.
    13. Stevenson, Rodney, 1980. "Measuring Technological Bias," American Economic Review, American Economic Association, vol. 70(1), pages 162-173, March.
    14. McMullen, B Starr & Stanley, Linda R, 1988. "The Impact of Deregulation on the Production Structure of the Motor Carrier Industry," Economic Inquiry, Western Economic Association International, vol. 26(2), pages 299-316, April.
    15. Stigler, George J, 1976. "The Xistence of X-Efficiency," American Economic Review, American Economic Association, vol. 66(1), pages 213-216, March.
    16. Wang Chiang, Judy S & Friedlaender, Ann F, 1985. "Truck Technology and Efficient Market Structure," The Review of Economics and Statistics, MIT Press, vol. 67(2), pages 250-258, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stephen V. Burks & Arne Kildegaard & Jason W. Miller & Kristen Monaco, 2023. "When is High Turnover Cheaper? A Simple Model of Cost Tradeoffs in a Long-Distance Truckload Motor Carrier, With Empirical Evidence and Policy Implications," Discussion Papers 2023-11, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    2. Rich, Daniel P., 2004. "6. Productivity, Technical Change And Labor Relations In Transportation Industries," Research in Transportation Economics, Elsevier, vol. 10(1), pages 109-135, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kevin E. Henrickson & Wesley W. Wilson, 2008. "Compensation, Unionization, and Deregulation in the Motor Carrier Industry," Journal of Law and Economics, University of Chicago Press, vol. 51(1), pages 153-177, February.
    2. Hernández, Carlos Eduardo & Cantillo-Cleves, Santiago, 2024. "A toolkit for setting and evaluating price floors," Journal of Public Economics, Elsevier, vol. 232(C).
    3. Robert J. Gordon, 1992. "Productivity in the Transportation Sector," NBER Chapters, in: Output Measurement in the Service Sectors, pages 371-427, National Bureau of Economic Research, Inc.
    4. John Bitzan & Wesley Wilson, 2007. "Industry costs and consolidation: efficiency gains and mergers in the U.S. railroad industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 30(2), pages 81-105, March.
    5. Pardey, Philip G. & Alston, Julian M. & Ruttan, Vernon W., 2010. "The Economics of Innovation and Technical Change in Agriculture," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 939-984, Elsevier.
    6. Chalfant, James & Wallace, Nancy, 1991. "Testing the Translog Specification with the Fourier Cost Function," CUDARE Working Papers 198581, University of California, Berkeley, Department of Agricultural and Resource Economics.
    7. Demont, Matty & Tollens, Eric, 1999. "The Economics Of Agricultural Biotechnology: Historical And Analytical Framework," Working Papers 31845, Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics.
    8. Guyomard, H. & Tavéra, C., 1990. "Technical change and agricultural supply-demand analysis problems of measurement and problems of interpretation," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 26.
    9. Dario Schulz & Jan Börner, 2023. "Innovation context and technology traits explain heterogeneity across studies of agricultural technology adoption: A meta‐analysis," Journal of Agricultural Economics, Wiley Blackwell, vol. 74(2), pages 570-590, June.
    10. McCarthy, Patrick S, 1995. "The 1982 Surface Transportation Assistance Act (STAA): Implications of relaxed truck weight and size limits for highway safety," Transport Policy, Elsevier, vol. 2(2), pages 107-117, April.
    11. Zhu, Shu & Xu, Xin & Ren, Xiaojing & Sun, Tianhua & Oxley, Les & Rae, Allan & Ma, Hengyun, 2016. "Modeling technological bias and factor input behavior in China's wheat production sector," Economic Modelling, Elsevier, vol. 53(C), pages 245-253.
    12. Fernando S. Machado, 1995. "Testing The Induced Innovation Hypothesis Using Cointegration Analysis," Journal of Agricultural Economics, Wiley Blackwell, vol. 46(3), pages 349-360, September.
    13. Jakeman, Guy & Hanslow, Kevin & Hinchy, Mike & Fisher, Brian S. & Woffenden, Kate, 2004. "Induced innovations and climate change policy," Energy Economics, Elsevier, vol. 26(6), pages 937-960, November.
    14. James Bessen, 2009. "More Machines, Better Machines...Or Better Workers?," Working Papers 0803, Research on Innovation.
    15. Isabelle Armanville & Peter Funk, 2003. "Induced innovation: an empirical test," Applied Economics, Taylor & Francis Journals, vol. 35(15), pages 1627-1647.
    16. Raymond J.G.M. Florax & Henri L.F. de Groot & Peter Mulder, 2011. "Energy Efficiency and Technological Change," Chapters, in: Raymond J.G.M. Florax & Henri L.F. de Groot & Peter Mulder (ed.), Improving Energy Efficiency through Technology, chapter 1, Edward Elgar Publishing.
    17. Abate, Megersa, 2014. "Does fuel price affect trucking industry’s network characteristics?: evidence from Denmark," Working papers in Transport Economics 2014:26, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    18. Boucher, Michel, 2020. "The Quebec LTL Market," 21st Annual Canadian Transportation Research Forum, Vancouver, British Columbia, May 28-30, 1986 305931, Canadian Transportation Research Forum (CTRF).
    19. Truett, Lila J. & Truett, Dale B., 2003. "A cost function analysis of import demand and growth in South Africa," Journal of Development Economics, Elsevier, vol. 70(2), pages 425-442, April.
    20. Michel Boucher, 1986. "L'inspiration americaine de la dereglementation en transport routier. (With English summary.)," Canadian Public Policy, University of Toronto Press, vol. 12(1), pages 189-201, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:retrec:v:6:y:2001:i:1:p:25-54. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/620614/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.