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The effects of diesel price on regional trade in the USA

Author

Listed:
  • Wojciech W Szewerniak
  • Yilan Xu
  • Sandy Dall’erba

Abstract

The abundant trade literature offers little insight on how diesel prices affect intranational trade. We fill this gap by calibrating a structural gravity model to recent U.S. interstate trade data. We discover that, for any distance, the elasticity of trade to diesel prices is much greater for low-valued commodities than for high-valued commodities. The general equilibrium result shows that a nationwide diesel price increase leads to heterogeneous decreases in trade across distances from the exporting state because of adjustments in multilateral costs and trade portfolio. Moreover, it increases the share of high-valued commodities in interstate trade.

Suggested Citation

  • Wojciech W Szewerniak & Yilan Xu & Sandy Dall’erba, 2019. "The effects of diesel price on regional trade in the USA," Journal of Economic Geography, Oxford University Press, vol. 19(5), pages 1099-1118.
    • Handle: RePEc:oup:jecgeo:v:19:y:2019:i:5:p:1099-1118.
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    File URL: http://hdl.handle.net/10.1093/jeg/lby052
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    Cited by:

    1. Rosado, João & Guerra, Daniel & Ferreira, Paulo, 2021. "Seasonality in fuel consumption: a case study of a gas station || Estacionalidad en el consumo de combustible: un estudio de caso de una gasolinera," Revista de Métodos Cuantitativos para la Economía y la Empresa = Journal of Quantitative Methods for Economics and Business Administration, Universidad Pablo de Olavide, Department of Quantitative Methods for Economics and Business Administration, vol. 32(1), pages 3-12, December.

    More about this item

    Keywords

    Trade; transport costs; diesel price; gravity model;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • Q49 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Other
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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