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This paper provides a dynamic analysis of the effects of the Motor Carrier Act of 1980 on the freight rates of Class I and II common general freight carriers. In addition to estimating rate equations, cost functions are also estimated to derive reliable measures of marginal cost. The specified rate equation also includes variables expected to affect the elasticity of demand. Simulations indicate that deregulation reduced rates in the 15-20% range by 1983 and in the 25-35% range by 1985, showing that the effect has grown over time.
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