The cost of railroad regulation: The disintegration of American agricultural markets in the interwar period

Giovanni Federico, Paul Sharp

Research output: Contribution to journalArticle

Abstract

This article investigates the costs of transport regulation using the example of agricultural markets in the US. Using a large database of prices by state of agricultural commodities, we find that dispersion fell for many commodities until the First World War. We demonstrate that this reflected changes in transport costs which in turn in the long run depended on productivity growth in railroads. The year 1920 marked a change in this relationship, however, and between the First and Second World Wars we find considerable disintegration of agricultural markets, ultimately as a consequence of the 1920 Transportation Act. We argue that this benefited railroad companies in the 1920s and workers in the 1930s, and we put forward an estimate of the welfare losses for the consumers of railroad services (that is, agricultural producers and final consumers).

Original languageEnglish (US)
Pages (from-to)1017-1038
Number of pages22
JournalEconomic History Review
Volume66
Issue number4
DOIs
StatePublished - Nov 1 2013

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Costs
Disintegration
Agricultural markets
Interwar period
Railroad
Interwar Period
Commodities
Workers
Agricultural commodities
Welfare loss
Second World War
Data base
Transport costs
Productivity growth
World War I
1920s
1930s
Productivity
Transport Costs
Data Base

ASJC Scopus subject areas

  • History
  • Economics and Econometrics

Cite this

The cost of railroad regulation : The disintegration of American agricultural markets in the interwar period. / Federico, Giovanni; Sharp, Paul.

In: Economic History Review, Vol. 66, No. 4, 01.11.2013, p. 1017-1038.

Research output: Contribution to journalArticle

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