Finally, the labor price variable interacted with the caboose variable is positive and significant, as one might reasonably expect, given that use of cabooses has meant use of more labor, so as wages go up, caboose use should raise costs further than without cabooses.
In order to better understand the implications of both time and cabooses for productivity change in rail freight, we performed three sets of simulations, the goal of which is to indicate the importance of both time and elimination of cabooses in productivity change in rail freight.
The first simulation measures the effects of the elimination of cabooses alone over the 1983-1997 period.
They indicate substantial savings both from the elimination of cabooses and from advances in other technologies.
9%, and 20% from changes in cabooses, time trend, and both changes, respectively; this compares with figures of 8.
The results shown in Table 4 are substantially similar to those in Table 3, except that they suggest a somewhat lower contribution of the elimination of cabooses to rail productivity over the period (5% of 1997 costs rather than 8% in Table 3) and a higher contribution of the general time trend (42-66% rather than the 32-33% in Table 3).
rail freight industry during the post-Staggers period, and, for the first time, they allow us to isolate the effects of one crucial innovation, which is the operation of trains with no cabooses.
It is worth noting as well that some of the benefits of elimination of cabooses are not included in our figures.
Furthermore, the elimination of cabooses from freight trains had yielded all its benefits in productivity growth by the mid-1990s, and if further innovations did not occur, productivity growth would have slowed; this point was made earlier by Martland (1999, pp.
Thus, the savings in labor and capital costs of eliminating the cabooses are offset (to at least a small degree) by the capital and maintenance costs of the "'end-of-train devices" (explained further later) that replaced the cabooses.
For a description of the technological role of cabooses and how technology made cabooses obsolete, see White (1993, esp.
11) Because the fraction of train miles with cabooses can take a value of zero, the natural logarithm of this variable is undefined in some cases.
This in turn requires that cabooses and their accompanying crews be "deadheaded" in one direction.
Second, it isolates the contribution to productivity and lower costs of a crucially important technological innovation implemented in the years shortly after deregulation, (2) namely, the ability to run trains with crews of two members, rather than four or five, and the elimination of the caboose, traditionally needed both for safety at the end of a freight train and as quarters for the two or three crew members now technologically obsolete.
The caboose mile variable (which is new to this paper and has not been used in previous research) ranges between zero and slightly greater than one.