Structural change in the U.S. freight railroad industry as a result of the Staggers Rail Act of 1980

Abstract

Many observers feel that the Staggers Rail Act of 1980 is responsible for a "renaissance" in the U.S. freight railroad industry. Prior to the passage of the Staggers Act, railroads had to petition for government approval for nearly every business decision. The ability of the railroad industry to enter and exit certain lines of business was strictly controlled, as was the ability of the industry to rationalize their physical plant. The Staggers Act removed most, but not all, of these regulatory restrictions. But this is the popular perception correct? By using a F test to compare a series of regressions, this thesis argues that Staggers did produce a structural change in the industry. Moreover, this thesis asserts that the changes noted in the results are consistent with the view that deregulation has been a success - that the industry is more efficient and that the benefits of deregulation have been shared between the railroads and the public.