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Unpublished Paper
Against the Stand-Alone-Cost Test in U.S. Freight Rail Regulation
ExpressO (2010)
  • Russell W. Pittman
Abstract

The stand-alone-cost test has become an expensive, extensive, and time-consuming part of the regulatory practice of the U.S. Surface Transportation Board in the performance of its statutory duty to protect "captive shippers" from monopoly rail rates. Worse, a close examination of the history of its adoption and application suggests only a very tenuous connection with its claimed intellectual foundations, the classic works of Faulhaber (1975) and Baumol, Panzar, and Willig (1982). It is time to retire this tool and replace it with something simpler and more effective and transparent.

Keywords
  • railroads,
  • regulation,
  • stand-alone cost,
  • Surface Transportation Board
Disciplines
Publication Date
April 7, 2010
Citation Information
Russell W. Pittman. "Against the Stand-Alone-Cost Test in U.S. Freight Rail Regulation" ExpressO (2010)
Available at: http://works.bepress.com/russell_pittman/2/