Transport costs in new economic geography models: A more realistic approach. (17th July 2019)

• Record Type: Journal Article
• Authors: Puente‐Ajovín, Miguel; Sanz‐Gracia, Fernando
• Is Part Of: International journal of economic theory. Volume 17:Number 3(2021)
• Page Start: 221
• Page End: 233
• Publication Date: 2019-07-17
• Subjects: iceberg approach -- new economic geography model -- transport cost; Economics -- Periodicals; 330.01
• DOI: 10.1111/ijet.12229
• Languages: English
• ISSNs: 1742-7355

Abstract

Abstract : This paper proposes an alternative method to the iceberg approach for modeling transport costs. Instead of part of the good evaporating in transit, we take as our basis the idea that certain workers in companies are in productive occupations in the strict sense, and others work in transport. This simple change is found to be capable of overcoming most of the criticisms associated with the iceberg approach.