Baumol-Tobin and the Welfare Costs of National Security Border Delays

Hui Huang and John Whalley

No 12296, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The implications of national security related procedures for trade flows at border points in OECD countries has become a major topic of commentary in popular press. We discuss whether the economic costs of border delays are represented solely by time spent in awaiting processing. This has been the basis of calculations in Canada-US-Ontario (2004) and Ontario Chamber of Commerce (2004, 2005) of advalorem equivalent tariff representations of the time delays involved. While time can be a significant part of the social cost of security related delays in customs clearance, added costs also arise from the behavioral response to delays and looking only at the time delays at the border can be misleading. We use a formulation where border delays occur with certainty and add to the fixed costs of importing in any period. We develop analytics for the case where there is endogeneity both in the frequency of transactions and in the size of individual transactions across the border in the tradition of the well known Baumol (1952) and Tobin (1952) inventory theoretical analysis of the demand for money.

JEL-codes: F1 F10 F13 F19 (search for similar items in EconPapers)
Date: 2006-06
New Economics Papers: this item is included in nep-int
Note: ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published as Huang, Hui & Whalley, John, 2008. "Baumol-Tobin and the welfare costs of national security border delays," Economics Letters, Elsevier, vol. 99(2), pages 290-292, May.

Downloads: (external link)
http://www.nber.org/papers/w12296.pdf (application/pdf)

Related works:
Journal Article: Baumol-Tobin and the welfare costs of national security border delays (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:12296

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w12296

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().