What determines demand for freight transport
Decisions about investments in the
            long-lived assets of transport infrastructure require some
            assumptions about prospective long-term demand from services
            using that infrastructure.  To improve the basis for such
            predictions, the authors estimated the long-run determinants
            of domestic freight transport, using single-equation
            regressions on a cross-section of data from developed
            (high-income), developing (low-income) and former socialist
            economies.  They also sought answers to two related
            questions. First, since statistics on national
            ton-kilometers of freight transport are much scarcer for
            developing than for developed countries, what is the scope
            for generalizing from data on high-income countries?
            Second, within what limits may one apply results obtained
            from data on market economies to the prospective evolution
            of freight transport demand in the socialist transitional
            economies?  They report the following finds, subject to
            caveats related to the simple methodology used.  For the
            sample of developed countries, and the merged samples of
            developed plus developing countries, total ton-kilometers of
            freight transport (excluding transit) are adequately
            explained by two variables:  a country's area and total
            GDP.  Ton-kilometers by road are chiefly explained by GDP;
            ton-kilometers by rail are explained by country area.  Road
            freight in developed and developing market economies shows
            very similar response (in additional ton-kilometers) to
            variations in GDP. But the elasticity of demand for road
            ton-kilometers with regard to GDP should be about or above
            1.25 for developing countries, compared with close to unity
            for the high-income countries.  Demand for rail freight
            transport appears to be determined in closely similar ways
            in both groups of countries. Elasticity with GDP appears to
            be close to unity.  Judging from the narrow basis of
            evidence on socialist economies (China and the former USSR
            were excluded for technical reasons), transport demand was
            determined very differently in their systems than in the
            market economies.  The contrasts are almost entirely
            explained by the differences in the role of, and demand for,
            rail transport in the different economic systems.  The road
            sector of freight transport, on the other hand, conforms
            closely to norms in the market economies; the marginal
            response (additional ton-kilometer for additional GDP) and
            elasticity with respect to GDP, appear - on the available
            evidence - to be close to what is found for developed market
            economies.  In short, structural change in the socialist
            economies is likely to bring about far greater changes in
            rail freight activity than in road transport.