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Directional Imbalance in Transport Prices: An Application to Inland Shipping in North-West Europe

Author

Listed:
  • Olaf Jonkeren

    (European Commission, JRC)

  • Jos N. van Ommeren

    (VU University Amsterdam)

  • Piet Rietveld

    (VU University Amsterdam)

Abstract

According to theory, the effect of carriers' transport costs on freight prices depends on the directional imbalance in transport flows. Using data on inland waterway transport, we demonstrate that when the ratio of export to import trips doubles, the marginal effect of carriers' transport costs on freight prices of goods exported increases by about 30 percent. Our identifying methodology is based on an innovative approach using natural variation in river water levels that affect the costs of transport.

Suggested Citation

  • Olaf Jonkeren & Jos N. van Ommeren & Piet Rietveld, 2011. "Directional Imbalance in Transport Prices: An Application to Inland Shipping in North-West Europe," Tinbergen Institute Discussion Papers 11-134/3, Tinbergen Institute.
  • Handle: RePEc:tin:wpaper:20110134
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    File URL: https://papers.tinbergen.nl/11134.pdf
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    More about this item

    Keywords

    directional imbalance; transport prices;

    JEL classification:

    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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