The Changing Incidence of Geography

James Anderson () and Yoto V. Yotov

No 14423, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The incidence of bilateral trade costs is calculated here using neglected properties of the structural gravity model, disaggregated by commodity and region, and re-aggregated into forms useful for economic geography. For Canada's provinces, 1992- 2003, incidence is on average some five times higher for sellers than for buyers. Sellers' incidence falls over time due to specialization, despite constant gravity coefficients. This previously unrecognized globalizing force drives big reductions in 'constructed home bias', the disproportionate predicted share of local trade; and large but varying gains in real GDP.

JEL-codes: F10 F15 R10 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo and nep-int
Date: 2008-10
Note: ITI
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Working Paper: The Changing Incidence of Geography (2008)
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