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[quote user="Datafever"]Could someone provide me with a definition of cross subsidization as it applies to railroad pricing? In my mind, a LOB is only being cross subsidized if revenue is less than variable costs.  From the posts on this thread, it appears that there are other definitions being used.  Anyone? [/quote] The STB standard is 180% of revenue to variable cost.  Thus, in the railroad context any rate structure which results in an R/VC of less than 180% is probably being cross subsidized by the rate structure in which revenues exceed variable costs by more than 180%.  Compare that to your statement above, where you believe cross subsidization only happens when revenues are less than 100% of variable costs.  For the record, the lowest R/VC ratio that I know of is 108%, so by your definition there is currently no cross subsidization taking place. Whether the 180% measure itself is too arbitrary is another discussion altogether.
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