Constant Returns to Scale in the Post Deregulatory Period: The Case of Specialized Motor Carriers

The cost structure of specialized motor carriers has become an important focus in the transportation economics literature. Typically, empirical estimates of scale economies are used to predict the impact of the 1980 regulatory reform on industry performance. For specialized carriers, the findings have been less than conclusive due to an unresolved debate about the proper level of industry aggregation. This research examines the household goods motor carrier industry, a well-defined disaggregated group of specialized motor carriers, using 1984 cross-sectional data, and finds the presence of constant returns to scale in the post-deregulatory period. -Authors