| Abstract: | ABSTRACT. In this paper we develop a method for establishing market definition in studies of intermodal competition. We employ the proposed method in a transportation model that yields estimates of the substitutability between truck and rail services for the transport of fresh fruits and vegetables. The model includes the produce being shipped as an input into the production of delivered produce. Our results demonstrate that fairly disaggregate market definitions are required to characterize adequately the intermodal substitution possibilities of interest. While disaggregate data are required for econometric estimation of the cost function, it is essential that elasticities be calculated at a disaggregate level as well. The elasticities reported are larger than reported in earlier work and provide strong evidence of vigorous intermodal competition in produce transportation markets. |
