IDEAS home Printed from https://ideas.repec.org/a/tpe/jtecpo/v49y2015i2p187-199.html
   My bibliography  Save this article

When and How Should Commodity Buyers Subsidise Freight?

Author

Listed:
  • Mike Smart

Abstract

A stylised international commodity trade model is used to show that when economic geography is suitable and collective action is feasible, it can be in the buyers' interests to subsidise freight. Unit price subsidies to the highest-cost supplier provide the greatest consumer benefit. Free on Board (FOB) pricing is one way to implement such a subsidy. The subsidy scheme requires a buyer cartel, which is vulnerable to defection. These analytical insights are used to interpret the causes of initial success and ultimate failure of the iron ore price benchmarking system. © 2015 LSE and the University of Bath

Suggested Citation

  • Mike Smart, 2015. "When and How Should Commodity Buyers Subsidise Freight?," Journal of Transport Economics and Policy, University of Bath, vol. 49(2), pages 187-199, April.
    • Handle: RePEc:tpe:jtecpo:v:49:y:2015:i:2:p:187-199
    as

    Download full text from publisher

    File URL: http://www.catchword.com/cgi-bin/cgi?ini=bc&body=linker&reqidx=0022-5258(20150401)49:2L.187;1-
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

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


    Cited by:

    1. Klepikov, Vladimir Pavlovich & Klepikov, Vladimir Vladimirovich, 2020. "Quantitative approach to estimating crude oil supply in Southern Europe," Resources Policy, Elsevier, vol. 69(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tpe:jtecpo:v:49:y:2015:i:2:p:187-199. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christopher F. Baum (email available below). General contact details of provider: http://www.bath.ac.uk/e-journals/jtep .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.