The Inefficiency of Regulating a Competitive Industry: Productivity Gains in Trucking Following Reform

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Abstract
This study confirms the higher productivity levels predicted by advocates of regulatory reform in trucking, and shows that these gains have been substantial. Cost simulations suggest that following a year of higher expenditures, efforts to remain competitive have yielded considerable cost savings which increase over time, from 1% in 1981 to 23% in 1984. The indirect effects of reform through the independent variables initially decrease costs but later lead to higher costs. The cumulative effect has been a less than 1% increase in costs in 1980, becoming by 1984, a significant 16% productivity gain.

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