ABSTRACT
The benefits that flowed from the increased integration of markets brought about by railways (after referred to as forward linkages) is the focus of this chapter. If data problems could be surmounted, social savings could quantify the real costs of diverting freight from railways onto roads and waterways. Such estimates represent the costs to an economy of 'sustaining' the actual transport services provided by railways over any selected year. However, while the extra costs of maintaining an equivalent transport service offers some measure of primary gain, it does not include the benefits that accrued from access to additional natural resources nor does it measure the advantages derived from the more efficient location of agricultural and industrial activity. Unless the shape of demand curves facing the producers of commodities transported to market by trains are known it is also probable that little can be inferred from data which simply shows percentage reductions in transport charges brought about by investment in railways.
