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The impact of highways on commodity prices : the price of butter in Japan

Author

Listed:
  • Hayakawa, Kazunobu
  • Tsubota, Kenmei

Abstract

This study empirically investigates the effect of highways on retail prices of butter in Japan. We take into account the relocation of butter producers because of the development of highways. We found that highway construction increased transportation speed, but the average transportation time from the production site also increased dramatically due to the increase in transportation distance. The latter factor occurred because of the concentration of butter factories in limited regions. As a result, on average, the increase in transportation time during 1966–1980 raised the price of butter by 3.3%. While the increase in speed reduced the price by 2%, the increase in transportation distance increased it by 5.3%.

Suggested Citation

  • Hayakawa, Kazunobu & Tsubota, Kenmei, 2020. "The impact of highways on commodity prices : the price of butter in Japan," IDE Discussion Papers 767, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    • Handle: RePEc:jet:dpaper:dpaper767
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    File URL: https://ir.ide.go.jp/record/51611/files/IDP000767_001.pdf
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    Cited by:

    1. is not listed on IDEAS
    2. Vincent Collins Matemba & Kasonde Mundende & Inonge Milupi, 2024. "Interaction Between Transportation Cost and Commodity Pricing in International Trade. Dry-Commodity Export Shippers’ Perspective in Malawi. The Trade Reducing Factor," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 11(5), pages 1020-1027, May.

    More about this item

    Keywords

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    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning

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