Increasing Returns in Transportation and the Formation of Hubs

Author Name MORI Tomoya  (Faculty Fellow, RIETI)
Creation Date/NO. January 2012 12-E-005
Research Project Formation of Economic Agglomerations and the Emergence of Order in their Spatial Patterns: Theory, evidence, and policy implications
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The spatial structure of transport networks is subject to increasing returns in transportation, distance, and density economies. Transport costs between locations are thus, in general, endogenous, and are determined by the interaction between the spatial distribution of transport demand and these increasing returns, although such interdependence has long been ignored in regional models. By using a simple model, the present paper investigates the characteristics of viable hub structures (in terms of spacing and hierarchical relations) given the presence of density and distance economies in transportation.

Published: Tomoya Mori, 2012. "Increasing Returns in Transportation and the Formation of Hubs," Journal of Economic Geography, Vol. 12(4), pp. 877-897