Economic Benefit of Maximum Truck Weight Regulation Change for Estonian Forest Sector

Discussions on Estonian Economic Policy No. 2/2011

14 Pages Posted: 6 Feb 2012

See all articles by Oliver Lukason

Oliver Lukason

University of Tartu

Kadri Ukrainski

University of Tartu - Faculty of Economics and Business Administration

Urmas Varblane

University of Tartu - Faculty of Economics and Business Administration

Date Written: November 1, 2011

Abstract

Current paper is focused on analyzing the economic benefit of increasing maximum allowed truck weight for Estonian forest sector. It is producing economic benefits to the firms of forest sector in two broad areas. The change in truck weight limit regulation is causing the reduction of transportation costs for forest sector firms.

Increase of the truck weight limit from current 44 up to 60 tonnes is going to reduce the share of transportation costs in roundwood material prices from 17.7% to 14.2%.

Secondly, the growth of demand for roundwood as the result of decreasing transportation costs was determined. Using own and cross elasticities between road and rail transportation, the apparent domestic consumption is expected to grow in the range from 0.7-4.6 % depending on the change of regulation from 44 to 60 tonnes, whereas in the most probable situation (change from 52 to 60 tonnes) the growth in apparent domestic consumption is 0.3-1.1%.

Keywords: maximum truck weight, forest sector, transportation demand, modal shift, economic benefit, elasticities

JEL Classification: L51, L92

Suggested Citation

Lukason, Oliver and Ukrainski, Kadri and Varblane, Urmas, Economic Benefit of Maximum Truck Weight Regulation Change for Estonian Forest Sector (November 1, 2011). Discussions on Estonian Economic Policy No. 2/2011, Available at SSRN: https://ssrn.com/abstract=1998842 or http://dx.doi.org/10.2139/ssrn.1998842

Oliver Lukason (Contact Author)

University of Tartu ( email )

Ülikooli 18
Tartu 50090, 50090
Estonia

Kadri Ukrainski

University of Tartu - Faculty of Economics and Business Administration ( email )

Narva Rd. 4-A214
Tartu 51009, 51009
Estonia

Urmas Varblane

University of Tartu - Faculty of Economics and Business Administration ( email )

Narva Road 4 - A226
Tartu
Estonia
+372 7 376 361 (Phone)
+372 7 376 327 (Fax)

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