Cities, Regions and the Decline of Transport Costs

Edward L. Glaeser and Janet Kohlhase

No 2014, Harvard Institute of Economic Research Working Papers from Harvard - Institute of Economic Research

Abstract: The theoretical framework of urban and regional economics is built on transportation costs for manufactured goods. But over the twentieth century, the costs of moving these goods have declined by over 90% in real terms, and there is little reason to doubt that this decline will continue. Moreover, technological change has eliminated the importance of fixed infrastructure transport (rail and water) that played a critical role in creating natural urban centres. In this article, we document this decline and explore several simple implications of a world where it is essentially free to move goods, but expensive to move people. We find empirical support for these implications.

Date: 2003
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Related works:
Chapter: Cities, regions and the decline of transport costs (2004)
Journal Article: Cities, regions and the decline of transport costs (2003)
Journal Article: Cities, regions and the decline of transport costs (2003)
Working Paper: Cities, Regions and the Decline of Transport Costs (2003)
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