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The effects of railroad development on price convergence among the states of the USA from 1866 to 1906

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  • Ebru Guven Solakoglu
  • Barry Goodwin

Abstract

This study examines the effects of the reduced transaction costs on the price behaviours in the second half of the nineteenth century, where declines in transaction costs were mainly caused by railroad development during this period. It employs a panel test introduced by Levin and Lin (1992) on the convergence of wheat and corn prices using a panel of 48 US states from 1866 to 1906. The results show that, by decreasing transportation costs, railroads played an important role in price convergence among states of the USA for wheat and corn during the postbellum period.

Suggested Citation

  • Ebru Guven Solakoglu & Barry Goodwin, 2005. "The effects of railroad development on price convergence among the states of the USA from 1866 to 1906," Applied Economics, Taylor & Francis Journals, vol. 37(15), pages 1747-1761.
  • Handle: RePEc:taf:applec:v:37:y:2005:i:15:p:1747-1761
    DOI: 10.1080/0003684052000344849
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    References listed on IDEAS

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    Cited by:

    1. Giovanni Federico & Paul Sharp, 2013. "The cost of railroad regulation: the disintegration of American agricultural markets in the interwar period," Economic History Review, Economic History Society, vol. 66(4), pages 1017-1038, November.

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