Stuck in the Slow Lane: Traffic Composition and the Measurement of Labor Productivity in the U.S. Trucking Industry

33 Pages Posted: 7 Feb 2007

See all articles by Kenneth Boyer

Kenneth Boyer

Michigan State University

Stephen V. Burks

University of Minnesota, Morris - Division of Social Science; Institute for the Study of Labor (IZA); Center for Decision Research and Experimental Economics (CeDEx); Center for Transportation Studies, University of Minnesota

Date Written: January 2007

Abstract

Mirroring the railroad industry of the 1940's and 1950's, the trucking industry today appears to be achieving impressive productivity gains. But it is easy to confuse true productivity advances in transportation industries with changes in ton-miles per unit of input that are due simply to changes in the composition of traffic, as initially happened with the mid-20th century U.S. railroads. This is due to the fact that transportation has vastly different productivities in different settings - for example, when moving long haul versus short haul traffic - and the measurement of changes in physical productivity can be overwhelmed by even subtle changes in the traffic mix. After controlling for endogenous changes in the composition of truck traffic, we find that trucking has in fact been a lagging sector of the U.S. economy over the period of our data, 1982-1997, with observed productivity changes much more likely due to changes in speed limits and the dimensions of vehicles than adoption of information technology. Our finding of a slow improvement in the physical productivity of trucking inputs does not deny the real improvements in the quality of trucking services (reliability, predictability, speed, order tracking, etc.) that have taken place in the last quarter century. But as in other service industries, true physical productivity improvements in trucking are hard to find.

Keywords: labor productivity, physical productivity, nominal versus real productivity, ton-mile, transportation, trucking industry, VIUS, traffic mix, long haul, short haul, service quality

JEL Classification: L92, D24, C43

Suggested Citation

Boyer, Kenneth D. and Burks, Stephen V., Stuck in the Slow Lane: Traffic Composition and the Measurement of Labor Productivity in the U.S. Trucking Industry (January 2007). IZA Discussion Paper No. 2576. Available at SSRN: https://ssrn.com/abstract=961851

Kenneth D. Boyer

Michigan State University ( email )

East Lansing, MI 48824
United States

Stephen V. Burks (Contact Author)

University of Minnesota, Morris - Division of Social Science ( email )

600 East 4th St.
Morris, MN 56267
United States
320-589-6191 (Phone)
320-589-6117 (Fax)

HOME PAGE: http://www.morris.umn.edu/academics/truckingproject/

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.iza.org/en/webcontent/personnel/photos/index_html?key=1883

Center for Decision Research and Experimental Economics (CeDEx) ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

HOME PAGE: http://www.nottingham.ac.uk/cedex/people/external/index.aspx

Center for Transportation Studies, University of Minnesota ( email )

200 Transportation & Safety Bldg.
511 Washington Ave. SE
Minneapolis, MN
United States
612-626-1077 (Phone)
612-625-6381 (Fax)

HOME PAGE: http://www.cts.umn.edu/

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