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Determinants of Transport Costs for Inter-regional Trade

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  • KONISHI Yoko
  • Se-il MUN
  • NISHIYAMA Yoshihiko
  • Ji Eun SUNG

Abstract

This paper presents a microeconomic model of inter-regional freight transportation based on careful formulation of the cost structure in trucking firms and market equilibrium, which takes into account the feature of transport service as a bundle of multiple characteristics. We estimate the parameters of the model using the micro-data of inter-regional freight flows from the 2005 Net Freight Flow Census in Japan. Estimation results show that the determinants of transport cost incorporated in the model have significant effects in the ways that the model predicts. The degree of competition also has significant effect on freight charge. It is shown that there exist significant scale economies with respect to lot size and long-haul economies. Quantitative extents of these effects are also demonstrated.

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Bibliographic Info

Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 12016.

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Length: 37 pages
Date of creation: Mar 2012
Date of revision:
Handle: RePEc:eti:dpaper:12016

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  1. Allen, W Bruce & Liu, Dong, 1995. "Service Quality and Motor Carrier Costs: An Empirical Analysis," The Review of Economics and Statistics, MIT Press, vol. 77(3), pages 499-510, August.
  2. Pierre-Philippe Combes & Miren Lafourcade, 2005. "Transport costs: measures, determinants, and regional policy implications for France," Journal of Economic Geography, Oxford University Press, vol. 5(3), pages 319-349, June.
  3. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
  4. Holt, Charles A, Jr, 1979. "Uncertainty and the Bidding for Incentive Contracts," American Economic Review, American Economic Association, vol. 69(4), pages 697-705, September.
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Cited by:
  1. KONISHI Yoko & Se-il MUN & NISHIYAMA Yoshihiko & Ji Eun SUNG, 2014. "Measuring the Value of Time in Freight Transportation," Discussion papers 14004, Research Institute of Economy, Trade and Industry (RIETI).

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