Furthermore, the safety and control functions required of cabooses and the crew members that occupied them were no longer required by the 1970s because they were automated via electronic controls.
First, the present model allows measurement of the contribution of a specific (and very important) technological innovation: the elimination of cabooses and the freight train crew members that go with them.
where C represents total costs, w is a vector of factor prices, y is a vector of outputs, a is a vector of technological attributes (including network size; in this case, the caboose variable can be regarded as a technological attribute), and T is a time trend variable, included to account for productivity change beyond that achieved through eliminating cabooses and associated labor.
CABOOSE = fraction of freight train miles operated with cabooses
The caboose variable (which increases as the fraction of trains with cabooses rises) is positive and significant, indicating that operating trains without cabooses and accompanying crews will indeed reduce costs (this result is discussed in more detail later).
However, it is possible that if the productivity gains from eliminating cabooses were exhausted by the early 1990s, the productivity growth from the two innovations combined could have slowed in the 1990s.
In order to better understand the implications of both time and cabooses for productivity change in rail freight, we performed three sets of simulations, the goal of which is to indicate the importance of both time and elimination of cabooses in productivity change in rail freight.
The first simulation measures the effects of the elimination of cabooses alone over the 1983-1997 period.
They indicate substantial savings both from the elimination of cabooses and from advances in other technologies.
Of particular interest is the dramatically low savings from greater productivity in 1997 for the Burlington Northern Santa Fe (BNSF) compared with other railroads in the sample: the BNSF lists savings of only 5.34%, 13.9%, and 20% from changes in cabooses, time trend, and both changes, respectively; this compares with figures of 8.2%, 32.2-33.4%, and 43.1 44.3%, respectively, for the average railroad in the sample.
That is that, in 1997, 4.24% of BNSF trains were still operating with cabooses, far more than for any other railroad (the median road in the sample, the Kansas City Southern, ran only 0.89% of its train miles with cabooses in 1997).