Determinants of Transport Costs for Inter-regional Trade

Author Name KONISHI Yoko  (Fellow, RIETI) /Se-il MUN  (Kyoto University) /NISHIYAMA Yoshihiko  (Kyoto University) /Ji Eun SUNG  (Research Assistant, RIETI / Kyoto University)
Creation Date/NO. March 2012 12-E-016
Research Project Decomposition of Economic Fluctuations for Supply and Demand Shocks
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This paper presents a microeconomic model of inter-regional freight transportation based on careful formulation of the cost structure in trucking firms and market equilibrium, which takes into account the feature of transport service as a bundle of multiple characteristics. We estimate the parameters of the model using the micro-data of inter-regional freight flows from the 2005 Net Freight Flow Census in Japan. Estimation results show that the determinants of transport cost incorporated in the model have significant effects in the ways that the model predicts. The degree of competition also has significant effect on freight charge. It is shown that there exist significant scale economies with respect to lot size and long-haul economies. The quantitative extent of these effects is also demonstrated.