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Intra-National Home Bias: Some Explanations

12 Pages Posted: 21 Jun 2002  

Russell H. Hillberry

University of Melbourne - Department of Economics; World Bank - Development Research Group (DECRG)

David L. Hummels

Purdue University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: June 2002

Abstract

Wolf (2000) demonstrates that trade within the U.S. appears substantially impeded by state borders. We revisit this finding with improved data. We show that much intra-national home bias can be explained by wholesaling activity. Shipments by wholesalers are much more localized within states than shipments from manufacturing establishments. Controlling for relative prices and the use of actual, rather than imputed, shipment distances also reduces home bias estimates.

Suggested Citation

Hillberry, Russell H. and Hummels, David L., Intra-National Home Bias: Some Explanations (June 2002). NBER Working Paper No. w9022. Available at SSRN: https://ssrn.com/abstract=316801

Russell H. Hillberry

University of Melbourne - Department of Economics ( email )

Melbourne, 3010
Australia

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

David L. Hummels (Contact Author)

Purdue University - Department of Economics ( email )

West Lafayette, IN 47907-1310
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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