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Abstract
In recent years there have been few railroad demand studies. Also, no study has investigated the
possibility of regional differences in railroad demand. The objective of the paper is to estimate
railroad demand functions for wheat, corn, sorghum, and soybeans for the United States as well as
the east and west regions. A two-region spatial equilibrium model is employed to specify the empirical
model in which railroad tons originated is the dependent variable. The explanatory variables
include railroad price per ton, crop production, and barge price per ton. The theoretically expected
sign is negative for rail price. Alternatively, the expected sign is positive for crop production and
barge rate. Results include estimates of railroad own-price elasticities and cross price elasticities
relative to barge transport. The estimates also reveal regional differences in railroad grain demand.