Estimating China Railway Freight Price Elasticity: Based On The Intermodal Competition

In the past three decades,railway freight has been subject to fierce intermodal competition(especially roads).As an important to optimize the allocation of resources and improve the operating conditions of railways,the market-oriented reform of railway freight prices has attracted attention.The question is: What is the price elasticity and its characteristics of railway freight demand under the intermodal competition? What enlightenment does this elasticity have for the reform of railway freight?Starting from the intermodal competition,this article analyzes the impact of competition on the price elasticity of railway freight demand,and believes that intermodal competition will improve the substitutability of railway,enhance the specificity,and reduce the cost.The proportion of expenditure has different effects on the price elasticity.Subsequently,this paper estimates the freight demand model at the annual,quarterly and regional levels,and calculates the cross-price elasticities.The main conclusions are as follows:(1)From the perspective of the overall freight market,the substitution of roads for railways has gradually increased,and competition has become increasingly fierce.The cross-price elasticity of railways has risen from 0.184 in 1985 to 0.225 in 2019.(2)From a quarterly perspective,the intermodal competition was fierce in the first quarter.(3)The regional differences in the degree of intermodal competition are obvious.Roads in most areas are more substitutable for railways;in addition,the cooperation between railways and highways in some areas is greater than competition.To a certain extent,this paper makes up for the lack of empirical research on the price elasticity of China’s railway freight demand.The innovations are:(1)The impact of intermodal competition on the price elasticity of railway demand is analyzed,and the cross-price elasticity is calculated from multiple angles.(2)Compared with similar research,this paper applies the translog derived demand function,which has a strong theoretical foundation and can easily calculate the elasticity.The policy recommendations of this article are as follows:(1)According to the difference in elasticity in space and time,focus on promoting the market-oriented reform of railway freight prices.(2)Guide railways to enter the container transportation and high value-added cargo transportation market,and force railways to carry out market-oriented reforms in freight prices.(3)Improve the information collection capacity of the freight market and promote the improvement of related systems.