Freight rate reform and regional burden: a general equilibrium analysis of western freight rate proposals.

This paper analyzes the income distributional consequences of Canadian prairie freight rate proposals within a simple general equilibrium context and casts the results in terms of the concept of a regional burden. The fact that some factors are both sector and region specific is emphasized in the discussion of the political economy of freight rate reform. The results suggest that in the short run farmers bear the brunt of the adjustment and the food industry is the main beneficiary. The aggregate real income loss is surprisingly small in light of the controversy regarding rate revisions. In the longer run, when most factors are mobile, the revisions lead to a small, across-the-board contraction of output. [ABSTRACT FROM AUTHOR]