The table below contains the information bearing on Coase's railroad example of

the private versus social cost problem. The farmer costs are due to fires caused by

the railroad.

Coase Railway Example Considering Direct Production Costs Only Farmer Costs Incremental Number of Value of Value of Cost of Net or Net Value of Value of Additional train runs Services Additional Running Margin on Run to Destroyed Crop on line Provided Run Trains Train Runs Railroad Crops Damage 0 0 150 150 50 100 100 60 60 2 250 100 100 150 50 120 60