transport fields. In this subsection, we will start with brief survey of these studies, and then we will show hypothetical welfare gains which could be obtained in case competition would drive fares down.

Since the deregulation movement in United State, many economists engaged in assessing the economic effects. For example, Morrison and Winston [1986] found that the deregulation in domestic air transport market in United States in 1978 had “led to a yearly welfare gain to travelers and carriers of roughly 8 billion dollars (in 1977 price) without generating any substantial losses to specific groups in society.” $ ^{13} $ Their paper was a pioneer as well as very sophisticated work. They defined compensation variations (CVs) as consumers’ surplus using a formula developed by Small and Rosen [1981]. CVs are the amount of money travelers could sacrifice following beneficial fare and service quality changes and be as well off after the changes as they were before them. Small and Rosen [1981] showed that CVs can be measured based on the mean (indirect) utility which can be estimated by specifying the probability of travelers’ choosing one mode by multinomial logit functions. Another example of estimating welfare changes by domestic air transport deregulation in United States was Koran [1983]. He estimated classical Marshallian consumer’s and producer’s surplus gain and he concluded that “airline fare deregulation resulted in an increase in consumer’s surplus of between fifteen and twenty dollars per round trip, while leaving airline profits unchanged.” $ ^{14} $ Koran’s contribution in this paper was that he explicitly took into consideration the travel time and delay cost changes in the ordinary demand function in estimating welfare changes.

There are also lots of econometric analysis on the trucking industry including estimation of welfare change by the deregulation policy. A seminal work of this kind was famous Meyer, Peck, Stenason and Zwick $ [1959] $ , which analyzed the competition in transport industries, especially between the rails and trucks. Another milestone in this field was Friedlaender and Spady $ [1981] $ , which was, in a sense, a modernized version of Meyer and others' work. They estimated cost functions of rails and trucks in trans-log functional form, analyzed the pricing behaviors of each mode, and proposed how the economic deregulation in the rails and trucks should have been done. In 1980, United States' Congress legislated the Motor Carrier Act which introduced effective competition into the trucking industry and the Stagger's Act which took away the almost all restriction on fare setting in the railroad freight transport, so, in effect, Friedlaender and Spady's analysis was done in the regulated environment.

If an industry are under an economic regulation, it is likely that the regulation bear dead weight loss and bring the economic rent to someone in the market, because the regulators may well behave to maximize their personal utilities or some objectives, as pointed out by Chicago school economists and researchers interested in public choice theory. $ ^{15} $ In such a situation, who could be beneficiaries by the regulation is another analytical point. Moore [1978] estimated that about two-