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On The (Mis)Measurement Of International Transport Costs

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  • Mihalis Chasomeris

Abstract

Several world institutions and researchers use import cif/fob ratios to measure a country's international transport costs. In this paper, the relationship between annual cif/fob ratios and compositions of imports are examined via correlation analysis. The findings show that where the quality of the data is reliable, a country's composition of imports has a significant effect on that country's cif/fob ratios; hence researchers cannot use the ratio as a reliable measure of direct shipping costs. Researchers should be wary of substituting country cif/fob ratios for direct measures of transport costs. Copyright (c) 2009 The Author. Journal compilation (c) 2009 Economic Society of South Africa.

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  • Mihalis Chasomeris, 2009. "On The (Mis)Measurement Of International Transport Costs," South African Journal of Economics, Economic Society of South Africa, vol. 77(1), pages 148-161, March.
  • Handle: RePEc:bla:sajeco:v:77:y:2009:i:1:p:148-161
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    1. Jeffrey A. Frankel, 1997. "Regional Trading Blocs in the World Economic System," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 72.
    2. Yeats, Alexander J, 1977. "Do International Transport Costs Increase with Fabrication? Some Empirical Evidence," Oxford Economic Papers, Oxford University Press, vol. 29(3), pages 458-471, November.
    3. Yeats, Alexander J, 1978. "On the Accuracy of Partner Country Trade Statistics," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 40(4), pages 341-361, November.
    4. Andrew K. Rose, 1991. "Why Has Trade Grown Faster than Income?," Canadian Journal of Economics, Canadian Economics Association, vol. 24(2), pages 417-427, May.
    5. Baier, Scott L. & Bergstrand, Jeffrey H., 2001. "The growth of world trade: tariffs, transport costs, and income similarity," Journal of International Economics, Elsevier, vol. 53(1), pages 1-27, February.
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