The impact of highways on commodity prices: The price of butter in Japan

Kazunobu Hayakawa and Kenmei Tsubota

Journal of Asian Economics, 2022, vol. 81, issue C

Abstract: This study empirically investigates the effect of highway construction on retail prices of butter in Japan. We consider the relocation of butter producers owing to the development of highways. We observed that highway construction increased transportation speed; however, the average transportation time from the production site dramatically increased with the increase in transportation distance. This was because of the concentration of butter factories in limited regions. Consequently, on average, the increase in transportation time during 1966–1980 raised the price of butter by 3.3 %. Furthermore, while the increase in speed reduced the price by 2 %, the increase in transportation distance increased the price by 5.3 %.

Keywords: Highways; Japan; Transportation time; Proximity-concentration trade-off (search for similar items in EconPapers)
JEL-codes: D04 H43 R42 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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Working Paper: The impact of highways on commodity prices: the price of butter in Japan (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:81:y:2022:i:c:s1049007822000604

DOI: 10.1016/j.asieco.2022.101503

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