Time as a Trade Barrier

David Hummels and Georg Schaur

American Economic Review, 2013, vol. 103, issue 7, 2935-59

Abstract: A large and growing share of world trade travels by air. We model exporters' choice between fast, expensive air cargo and slow, cheap ocean cargo, which depends on the price elasticity of demand and the value that consumers attach to fast delivery. We use US imports data that provide rich variation in the premium paid for air shipping and in time lags for ocean transit to extract consumers' valuation of time. We estimate that each day in transit is equivalent to an advalorem tariff of 0.6 to 2.1 percent. The most time-sensitive trade flows involve parts and components trade.

JEL-codes: F13 F14 L93 (search for similar items in EconPapers)
Date: 2013
Note: DOI: 10.1257/aer.103.7.2935
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Citations: View citations in EconPapers (319)

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Related works:
Working Paper: Time as a Trade Barrier (2012)
Working Paper: Time as a Trade Barrier (2001)
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