A statistical study of intrastate vs. interstate regulatory reforms

Significant steps toward deregulation and re-regulation of the transportation industry have occurred in the past decades. It is essential to anticipate and to monitor the effect of such reforms. In this study, we use a data-set from the Pacific Northwest--a region blessed with rich agricultural products. Essentially 100% of the dry peas and lentils produced in the United States are grown in eastern Washington, northern Idaho, and northeastern Oregon. This region is also noted for the variety of modal choice--including trucking, rail, and inland waterways--to ship bean products overseas. Bean products can be exported through ports in the West, Gulf or the East. The full choice of intrastate modes to Seattle/Portland (West) has led to a meticulous regulatory-policy within Washington State to face interstate modal-competition. Such intrastate policies may be more favorable toward Washington State, when interstate-regulation was rigid. We trace the modal choice before and after the deregulation of interstate road and rail transport for the period 1978-1982. A statistical study using a multinomial logit-model suggests that regulation had a major influence on modal choice. While intrastate transport was still regulated after interstate deregulation, shipments to overseas markets favored interstate routes over intrastate routes. This relationship should have significant bearing upon future regulatory reforms.