All rights reserved iii PREFACE Comparatively low-cost freight transportation has been an important element in the growth of the U.S. economy. Goods can be transported between most points in the country quite cheaply and efficiently. To varying degrees, however, the freight transportation services we consume generate costs that are borne by others. Such costs are commonly referred to as external costs. From a societal perspective, it is desirable for all transportation services to pay their

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... social (private and external) costs. If the full social cost were reflected in the prices shippers pay, transportation users could choose the amount of each form of service to consume on the basis of the true cost of this service to society. By "internalizing" external costs, policy makers would effectively create a market through which transportation users could weigh the benefits of consuming a particular transportation service against the true costs. The purpose of this monograph is to estimate these true costs for freight truck and rail. v ACKNOWLEDGMENTS In the preface I mention that this research was funded by the University Transportation Centers Program of the U.S. Department of Transportation and by the Iowa Department of Transportation. Both of these agencies have my gratitude for their support.