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Measuring Transaction Costs: Diverging Approaches, Contending Practices

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  • NING WANG

    (School of Global Studies, Arizona State University, Tempe, AZ 85287-5102, USA)

Abstract

This paper brings order to the vast conceptual and empirical literature on measuring transaction costs. It critically reviews the broad and diverse landscape of the field of transaction costs measurement, ranging from financial economics, Williamsonian transaction cost economics, the transaction sector, non-marketed transaction costs, environmental economics and natural resource management, institutions and development, and the economics of identity. Three sources of and three approaches to transaction costs are identified. Though the literature as a whole appears in disarray, each research program is driven by its own internal dynamics between conceptual and empirical challenges. The paper proposes that a systematic investigation of the light that the concept of transaction cost sheds on the structure of production stands out as a most promising approach to move the field forward.

Suggested Citation

  • Ning Wang, 2007. "Measuring Transaction Costs: Diverging Approaches, Contending Practices," Division of Labor & Transaction Costs (DLTC), World Scientific Publishing Co. Pte. Ltd., vol. 2(02), pages 111-146.
    • Handle: RePEc:wsi:dltcxx:v:02:y:2007:i:02:n:s0219871107000324
    DOI: 10.1142/S0219871107000324
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Coggan, Anthea & Buitelaar, Edwin & Whitten, Stuart & Bennett, Jeff, 2013. "Factors that influence transaction costs in development offsets: Who bears what and why?," Ecological Economics, Elsevier, vol. 88(C), pages 222-231.
    2. Nitzan, Jonathan & Bichler, Shimshon, 2018. "El capital como poder. Un estudio del orden y el creorden," EconStor Books, ZBW - Leibniz Information Centre for Economics, number 177844, July.
    3. Nitzan, Jonathan & Bichler, Shimshon, 2009. "Capital as Power. A Study of Order and Creorder," EconStor Books, ZBW - Leibniz Information Centre for Economics, number 157973, July.
    4. Browne, Oliver R. & Ji, Xinde James, 2023. "The Economic Value of Clarifying Property Rights: Evidence from Water in Idaho’s Snake River Basin," Journal of Environmental Economics and Management, Elsevier, vol. 119(C).
    5. Sedlarski, Teodor & Ankova, Iliana, 2010. "Възможност За Счетоводно Отчитане На Транзакционните Разходи В Предприятията [A Possible Way to Estimate Transaction Costs Through the Firm's Accounting System]," MPRA Paper 52428, University Library of Munich, Germany.
    6. Phan, Thu-Ha Dang & Brouwer, Roy & Davidson, Marc David, 2017. "A Global Survey and Review of the Determinants of Transaction Costs of Forestry Carbon Projects," Ecological Economics, Elsevier, vol. 133(C), pages 1-10.
    7. Graham R. Marshall, 2020. "Evaluating Adaptive Efficiency in Environmental Water Recovery: Application of a Framework for Institutional Cost-Effectiveness Analysis," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 6(02), pages 1-28, April.
    8. Merkert, Rico, 2010. "Changes in transaction costs over time - The case of franchised train operating firms in Britain," Research in Transportation Economics, Elsevier, vol. 29(1), pages 52-59.
    9. Wang Ning, 2018. "The Theory of Share Tenancy and the Old “Good Economics”," Man and the Economy, De Gruyter, vol. 5(1), pages 1-5, June.
    10. Foscaches, Caroline & Macchione Saes, Maria Sylvia & Bigio Schnaider, Paula Sarita, 2019. "Does social identity matter in governance decisions? Evidence from an agrarian reform settlement in Brazil," Land Use Policy, Elsevier, vol. 83(C), pages 215-226.

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    More about this item

    Keywords

    Transaction costs; transaction cost economics; transaction cost measurement; structure of production;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D - Microeconomics
    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • F - International Economics
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • L - Industrial Organization
    • O - Economic Development, Innovation, Technological Change, and Growth

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