9 Chapter 2 are likely to enter into the explanation of the inter-country differences in rail freight and are not caught in our model.

30. Railways are normally the chosen mode for the long-haul transport of basic bulk commodities. But adding national output of coal, lignite and iron ore to our independent variables yields insignificant results. Again, there is the historical factor: railways developed long before trucking, and hence before the networks of main roads, reached their present extent. We therefore entered the ratio of paved road length to country area as another explanatory variable. The sign on the coefficient of this ratio was negative, as expected. The coefficient estimate itself, however, was not significant.

Table 3: Regression Results - Rail _Tlm_

|**_Ana_**=Kl!f<br>**GDP**=ICP**Interl**|5_(inons)_||Dependent <br>(in mullion|**Vauiable**= <br>s)|**RaDl lm**||**Dependent**<br>(Mon)|**Variabul**=|**LN(RaB Tm**||
|---|---|---|---|---|---|---|---|---|---|---|
|**Sample**|**|Ldep.**<br>**Var.(x)**|<br>**Iof**<br>Obs.|_X_<br>**_cod,_**|T<br>**Value**|**Coinan1**|**Adj.**<br>**R2**|**I**<br>**Codr.**|T<br>**Vailu**|**conn**|**_Ad_._**|
|A:**_Total_Sam;o**|**Am**|33|**0.08289**|**8.913**|**(2.287.7)**|0.71|**0.96452**|**3.650**|**(30)**|**0.28**|
|A:**_Tdal_**Stmpl|**GODP**|33|**_0.11096_**|2.933|7,964.0|**0.19**|**.26787**|**5.65**|**(14.8**|**0.51**|
|**A.****_TOtalSam_**|**_Am_**<br>GDP|33|0.07657<br>**0.03103**|**7.628**<br>**1.2**|(7,075.1)|**0.72**|0.42126<br>**l.05337**|l.714*<br>4.33l|**(15.9)**|**0.54**|
|B:**Donloped**|**Am**|**17**|0.09822|9.195|,079.1)|**0.84**|**1.02694**|**4.299**|**(3.4)**|**0.52**|
|B: Dloed|GDP|**27**|**00A62**|1.4190|21,291.0|**0.06**|**1.23650**|**4.746**|**(4.4)**|0.57|
|B: DavwFp9d|**Ana**<br>**GDP**|17|0.09463<br>0.0307|**9.3s**<br>**1w**|**(16.237.7)**|**0.85**|0.66276<br>**o.86418**|3310<br>3.738|(I5.4)|0.74|
|**C:**D[vvrd+DonrsDg|**Ama**|28|0.0804|1l.623|(11,484.6)|0.83|**_I2n60_**<br>|**4**<br>4.291|(4.6)|0.39|
|C:**Doeld+D.1olwr2ig**|**GDP**|**28**|0.22797|**2.995**|459.9|**023**|**.33477**|7.236|**_(6.4)_**|0.65|
|C: Dwil'd+Dne1'nig<br>I<br>.<br>...........|**Am**<br>**GDP**<br>.<br>-|28<br>-|0.07961<br>**0.03840**<br>-|10.445<br>IMP<br>-|(18.084.4)<br>-.|0.85<br>-.|**0.52662**<br>1.07541<br>-|**2.668**<br>**5.552**<br>-..|(18.0)<br>-.|**0.72**<br>-.|
|**D-. O3ewd+Sociallms**|**Am**|22|**0.09254**|6.645|**3,786.5**|**0.67**|**0.95732**|3.750|a<br>**.2)**|**0.38**|
|**D-**Deverd+Soialime|GDP|22|**0.0632l**|**1.348**|**22,626.7**|0.04|**I2.04_**|**3.4A8**|**(9.5)**|034|
|**1- DNwrd+So"la**|**_**|**A**<br>22|0.09037|6.147|**_525.0_**|0.66|0.67265|**2.436**|**(05)**|0.47|
||GDP||0.01530|**0.559**|||**0.67**|**2.W**|||
|**'AlU**<br>**lwlabh**<br>In nDml**k**<br>I|**g.**<br>Not|slg,|2&m at**_5% Io_**|**_WS_**<br>**_._**|||||||

31. Some indication of the effect of GDP on rail freight is, however, provided by the estimated elasticities. Logarithmic formulation lowers the explanatory power of our model (the R<sup>2</sup> ) but the estimated coefficients on both area and GDP are significant, and of a size that agrees with intuition. The elasticity of rail ton-kms with respect to area is somewhat lowered when the poorer countries are added to the set of "developed" countries. The GDP elasticity, however,