Demand Analysis for Coal on the United States Inland Waterway System: Fully Modified Cointegration (FM-OLS) Approach

The Phillip-Hansen fully-modified cointegration (FM-OLS) approach is applied to examine the dynamic relationship between demand for coal barge transportation, and explanatory variables such as barge and rail rates, domestic coal consumption and production, and coal exports. The results provide strong evidence that there exists a long-run equilibrium relationship between demand for coal barge transportation and the selected variables. It is also found that, in the long-run, the domestic coal consumption and coal exports are more important than other variables in determining the demand for coal barge transportation. In the short run, on the other hand, domestic coal production is found to be the only significant determinant of coal demand. This dynamic analysis will shed new light on the dynamic interrelationships between the demand for coal barge transportation and its major determinants, and contribute to the empirical literature on transportation economics

Demand Analysis for Coal on the United States Inland Waterway System: Fully Modified Cointegration (FM-OLS) Approach

The Phillip-Hansen fully-modified cointegration (FM-OLS) approach is applied to examine the dynamic relationship between demand for coal barge transportation, and explanatory variables such as barge and rail rates, domestic coal consumption and production, and coal exports. The results provide strong evidence that there exists a long-run equilibrium relationship between demand for coal barge transportation and the selected variables. It is also found that, in the long-run, the domestic coal consumption and coal exports are more important than other variables in determining the demand for coal barge transportation. In the short run, on the other hand, domestic coal production is found to be the only significant determinant of coal demand. This dynamic analysis will shed new light on the dynamic interrelationships between the demand for coal barge transportation and its major determinants, and contribute to the empirical literature on transportation economics

Modeling the Transport Infrastructure-Growth Nexus in the United States

The rising government funding in transport infrastructure has sparked political and academic debates on the economic impacts of transport infrastructure investment in the United States. Although numerous empirical studies have examined the transport infrastructure-growth nexus, existing literature has mixed conclusions of the economic effects of expanding transport infrastructure. The main objective of this paper is to assess the short- and long-run impacts of transport and non-transport public infrastructure on economic growth to provide an implication of the effectiveness of these fiscal policy tools in the short- and long-term. For this purpose, we employ a modern autoregressive distributed lag (ARDL) approach to explore the dynamic relationships among transport infrastructure, non-transport public infrastructure, private capital, labor hours, GDP, and exports. In the long run, we find that a bidirectional relationship exists between transport infrastructure and GDP, suggesting that expanding transport infrastructure improves aggregated economic output, and enhanced economic output increases public investment in transport infrastructure. However, the magnitude of the impact of transport infrastructure on GDP is smaller than that of non-transport public infrastructure, implying that non-transport infrastructure investment is a more effective long-term fiscal stimulus than expanding transport infrastructure

THE ECONOMICS OF CONTROLLING INFECTIOUS DISEASES ON DAIRY FARMS

Cost effective disease control on the dairy farm can enhance productivity and subsequently profitability. Previous economic studies on animal disease have focused on production losses and evaluation of disease eradication programs and provided little guidance as to the optimal prevention action. This paper presents a theoretical model on the economics of livestock disease and develops an empirical model to determine the optimal set of control strategies for four production limiting cattle diseases: bovine viral diarrhea (BVD), enzootic bovine leukosis (EBL), Johne's Disease (JD) and neosporosis. Control functions indicating the prevalence of infection with each of the four diseases for each of the ten strategies are estimated. The optimal strategies that minimize total disease cost (direct production losses and control expenditures) are provided for each disease on the basis of farm survey results from the Maritime provinces. The results emphasize the importance of introduction checks before new animals enter the herd and adequate vaccination protection as cost-effective control strategies.Farm Management, Livestock Production/Industries,

Explaining US travel behavior with perceived threat of pandemic, consumer sentiment, and economic policy uncertainty

Since the COVID-19 outbreak, consumer behavior has been affected by the perceived threat of the pandemic and economic uncertainty. This paper aims to explore the dynamic effects of COVID-19, consumer sentiment, economic policy uncertainty, and fuel prices on travel behavior in the United States. Using updated daily trip data, the results show that consumer sentiment has a positive long-run impact on travel demand for air and auto, suggesting that a positive change in consumer sentiment can boost demand for these modes of transportation in the long term. Additionally, consumer sentiment has a favorable effect (1.34) on demand for long-distance trips, but it has a negative impact (−0.42) on the number of people staying at home. Economic and political shocks have a detrimental impact on demand for air and auto travel, suggesting that consumers reduce the frequency and cost of these transport services if they have pessimistic expectations about the future state of the economy and policy. However, in the short term, US travelers appear to be insensitive to shocks in consumer sentiment and economic policy uncertainty. Regarding the perceived threat of the pandemic, the results indicate that rising COVID-19 cases have a negative long-term effect on demand for air travel (−0.09) and public transit (−0.19), while they are positively associated with demand for auto travel (0.06). Similarly, the increasing number of deaths due to COVID-19 has led to a shift from shared-use mass transportation (air travel and public transit) to private autos and non-motorized travel, such as walking in the short term

Income and Exchange Rate Sensitivities of Cross-Border Freight Flows: Evidence from U.S.-Canada Exports and Imports by Truck, Rail, Air, and Pipeline

This paper aims to improve understanding of the long-run impacts of the gross domestic product (GDP), real exchange rate, and the producer price index (PPI) on U.S.-Canada bilateral freight flows in a dynamic framework. Special attention is given to cross-border exports and imports by truck, rail, pipeline, and air. Using the fully modified ordinary least squares (FM-OLS) approach, the paper finds that the GDP of the importing country is a pronounced factor influencing U.S.- Canada cross-border trade, suggesting that economic growth of the country is a powerful driver in the relative intensity of bilateral freight flows. The real exchange rate tends to be positively associated with U.S. imports, but negatively associated with U.S. exports, indicating that the U.S. dollar depreciation against the Canadian dollar increases demand for U.S. commodities in Canada, but weakens demand for Canadian commodities in the United States. The long-run effects of the selected economic variables on cross-border exports and imports are found to vary by mode of transportation. The Canadian GDP has a positive and significant effect on U.S. freight exports by all transportation modes, but U.S. exports by pipeline are more sensitive to a change in Canadian GDP than U.S. exports by truck and rail. The findings in this paper provide important policy and managerial implications for cross-border transportation planning in the United States and Canada

Income and Exchange Rate Sensitivities of Cross-Border Freight Flows: Evidence from U.S.-Canada Exports and Imports

by Junwook Chi This paper aims to improve understanding of the long-run impacts of the gross domestic product (GDP), real exchange rate, and the producer price index (PPI) on U.S.-Canada bilateral freight flows in a dynamic framework. Special attention is given to cross-border exports and imports by truck, rail, pipeline, and air. Using the fully modified ordinary least squares (FM-OLS) approach, the paper finds that the GDP of the importing country is a pronounced factor influencing U.S.-Canada cross-border trade, suggesting that economic growth of the country is a powerful driver in the relative intensity of bilateral freight flows. The real exchange rate tends to be positively associated with U.S. imports, but negatively associated with U.S. exports, indicating that the U.S. dollar depreciation against the Canadian dollar increases demand for U.S. commodities in Canada, but weakens demand for Canadian commodities in the United States. The long-run effects of the selected economic variables on cross-border exports and imports are found to vary by mode of transportation. The Canadian GDP has a positive and significant effect on U.S. freight exports by all transportation modes, but U.S. exports by pipeline are more sensitive to a change in Canadian GDP than U.S. exports by truck and rail. The findings in this paper provide important policy and managerial implications for cross-border transportation planning in the United States and Canada