Department of Economics, University of Kansas
1300 Sunnyside Ave
Lawrence KS 66045
NBER Working Papers and Publications
|February 2007||The Trade Reducing Effects of Market Power in International Shipping|
with David Hummels, Volodymyr Lugovskyy: w12914
Developing countries pay substantially higher transportation costs than developed nations, which leads to less trade and perhaps lower incomes. This paper investigates price discrimination in the shipping industry and the role it plays in determining transportation costs. In the presence of market power, shipping prices depend on the demand characteristics of goods being traded. We show theoretically and estimate empirically that shipping firms charge higher prices when transporting goods with higher product prices, lower import demand elasticities, and higher tariffs, and when facing fewer competitors on a trade route. These characteristics explain more variation in shipping prices than do conventional proxies such as distance, and significantly contribute to the higher shipping prices fa...
Published: Hummels, David & Lugovskyy, Volodymyr & Skiba, Alexandre, 2009.
"The trade reducing effects of market power in international shipping,"
Journal of Development Economics,
Elsevier, vol. 89(1), pages 84-97, May.
citation courtesy of
|June 2002||Shipping the Good Apples Out? An Empirical Confirmation of the Alchian-Allen Conjecture|
with David Hummels: w9023
We model demand for quality differentiated goods to derive a relationship between trade costs and the quality composition of trade. Detailed data on traded goods' prices, quantities and shipping costs for many importers and exporters are used to test these predictions. These data provide a strong rejection of the iceberg assumption on transportation costs and a strong confirmation of the classical Alchian Allen hypothesis. Within a narrowly defined commodity classification, exporters charge destination-varying prices that co-vary positively with shipping costs and negatively with tariffs. Shipping costs operate as a quantitative restriction similar to quotas.
Published: David Hummels & Alexandre Skiba, 2004. "Shipping the Good Apples Out? An Empirical Confirmation of the Alchian-Allen Conjecture," Journal of Political Economy, University of Chicago Press, vol. 112(6), pages 1384-1402, December. citation courtesy of