Trade margins, transport cost thresholds and market areas: municipal freight flows and urban hierarchy
Entity
UAM. Departamento de Antropología Social y Pensamiento FilosóficoPublisher
UAM. Departamento de Análisis Económico, Teoría Económica e Historia EconómicaDate
2013Serie/Num.
Economic analysis working papers series. 10/2013ISSN
1885-6888Subjects
Municipal freight flows; Transport costs; Breakpoints; Market areas; Urban hierarchy; Central place theory; EconomíaAbstract
Recent research has determined the existence of a border effect on trade flows within a
country associated to agglomeration economies, the size of the spatial unit of reference, as
well as to alternative measures of transport costs. Using a micro-database on road freight
shipments within Spain for the period 2003-2007, we consistently decompose the total value
of municipal freight flows into the extensive and intensive margins at the European Nuts-5
(municipal), 3 (provincial) and 2 (regional) levels and study the impeding effect of actual
generalized transport costs (as opposed to proxies given by the standard measures of distance
and travel time). Establishing the superiority of this generalized measure of transport
costs, we confirm the accumulation of trade flows up to a transport cost value of 330 euros,
and conclude that this high density is not explained by the existence of administrative limits
(border effects) but to significant changes in the trade flows-transport costs relationship.
While this high density of trade coincides with low level administrative borders (municipal
and provincial) as there is a positive and significant effect associated to them on all trade
decomposition, it is not significant, or even negative, at a larger regional level. To support
this hypothesis, we identify significant thresholds in the trade flows-transport costs relationship
that are calculated by way of the Chow test of structural change. These breakpoints
allow us to split the sample and control for successive administrative borders in both the
extensive and intensive margins. Relying on these thresholds we define relevant market areas
corresponding to specific transport costs values that portrait a consistent urban hierarchy
system of the largest Spanish cities within a radius of about 330 euros, thereby providing
clear evidence of the predictions made by the central place theory.
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Google Scholar:Díaz Lanchas, Jorge
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Llano Verduras, Carlos
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Zofío Prieto, José Luis
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