Advanced Search
MyIDEAS: Login

Road expansion and market integration in the Austrian low countries during the second half of the 18th century

Contents:

Author Info

  • Erik Buyst
  • Stefan Dercon
  • Bjorn Van Campenhout

Abstract

We analyse the integration of wheat markets across 18 towns in the Austrian Low Countries during the second half of the 18th century and the relationship with the rapidly expanding paved road network in this period. We use a switching regression approach (threshold cointegration) to study long-run and short-run integration of these markets, using monthly wheat prices. We find that throughout this period, markets were spatially interconnected. However, price margins adjust only slowly to long-term levels in response to local shocks. We also find that transaction costs are relatively high. The results suggest a complex market with regular trade flow reversals and periods of unprofitable trade between key markets. It is widely accepted in Belgian historiography that the construction of a paved road network caused a substantial reduction in transaction costs. Our research, however, indicates that distance, fixed costs or links by rivers and canals mainly influenced transaction costs, not the expansion of a paved road network. Two factors can account for this. First, the toll structure on paved roads discouraged bulk trade. Secondly, new private investment in inter-city grain trade that may have led to cuts in the trading costs, typically appeared to be absent in this period. However, adjustment speeds in markets are significantly affected by the existence of paved roads. Better communication and faster transport due to the road network resulted in faster arbitrage.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.econ.kuleuven.be/eng/ew/discussionpapers/Dps00/Dps0010.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Katholieke Universiteit Leuven, Centrum voor Economische Studiën in its series Center for Economic Studies - Discussion papers with number ces0010.

as in new window
Length:
Date of creation: Mar 2000
Date of revision:
Handle: RePEc:ete:ceswps:ces0010

Contact details of provider:
Postal: Naamsestraat 69, 3000 Leuven
Phone: +32-(0)16-32 67 25
Fax: +32-(0)16-32 67 96
Email:
Web page: http://www.econ.kuleuven.be/ew
More information through EDIRC

Related research

Keywords:

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Brunt, Liam & Cannon, Edmund, 2013. "Integration in the English wheat market 1770-1820," Discussion Paper Series in Economics 12/2013, Department of Economics, Norwegian School of Economics.

Lists

This item is featured on the following reading lists or Wikipedia pages:
  1. Historical Economic Geography

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ete:ceswps:ces0010. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Karla Vander Weyden).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.