Geographic Elasticity Estimates of the Barge Demand of Grain Elevators Located on the Upper Mississippi and Illinois Rivers

This paper investigates patterns in the demand for barge transportation along the inland waterway system. Non-parametric techniques including both rolling regression and locally weighted regressions are used to visually analyze the pattern of elasticity estimates along the river at the pool level. The results of these non-parametric approaches visually indicate that barge demand elasticity may be more elastic on both the southern and northern reaches of the river, while being more inelastic toward the center of the waterway system. Based on the non-parametric analysis, higher order elasticity terms are used to parametrically investigate the pattern of elasticity along the inland waterway system. Using the parametric approach, the same patterns of elasticity arise wherein demands are relatively more elastic on the northern and southern ends of the waterway system and relatively less elastic in the center.