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Transport Demand and Spatial Equilibria


  • Mike Smart


Characteristics of transport demand are inferred from spatial equilibrium with exogenous locations. For non-trivial spatial distributions of firms and markets I derive computable expressions for elasticity of transport demand, producer surplus, and consumer surplus as a function of the mass-distance price of transport. Producer surplus is likely to have one or more local maxima, suggesting a disincentive for producers to minimise transport costs. Numerical simulation is used to illustrate results. A method is suggested for computing simultaneous transport and commodity market equilibria for spatially dispersed markets. © 2008 LSE and the University of Bath

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  • Mike Smart, 2008. "Transport Demand and Spatial Equilibria," Journal of Transport Economics and Policy, University of Bath, vol. 42(2), pages 323-348, May.
  • Handle: RePEc:tpe:jtecpo:v:42:y:2008:i:2:p:323-348

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    References listed on IDEAS

    1. David Besanko & Sachin Gupta & Dipak Jain, 1998. "Logit Demand Estimation Under Competitive Pricing Behavior: An Equilibrium Framework," Management Science, INFORMS, vol. 44(11-Part-1), pages 1533-1547, November.
    2. Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-890, July.
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    1. Raballand, Gael & Macchi, Patricia & Merotto, Dino & Petracco, Carly, 2009. "Revising the roads investment strategy in rural areas : an application for Uganda," Policy Research Working Paper Series 5036, The World Bank.

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