Cities, Regions and the Decline of Transport Costs

54 Pages Posted: 5 Aug 2003

See all articles by Edward L. Glaeser

Edward L. Glaeser

Harvard University - Department of Economics; Brookings Institution; National Bureau of Economic Research (NBER)

Janet E. Kohlhase

University of Houston - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: July 2003

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.

Keywords: Transport Costs, Congestion, Spatial Distribution of Economic Activity, Concentration and Decentralisation, Productivity, Growth of Cities and Regions, Density

JEL Classification: R12, R14, R23, R41, J30

Suggested Citation

Glaeser, Edward L. and Kohlhase, Janet E., Cities, Regions and the Decline of Transport Costs (July 2003). Harvard Institute of Economic Research Discussion Paper No. 2014. Available at SSRN: https://ssrn.com/abstract=431741 or http://dx.doi.org/10.2139/ssrn.431741

Edward L. Glaeser (Contact Author)

Harvard University - Department of Economics ( email )

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Brookings Institution

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National Bureau of Economic Research (NBER)

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Janet E. Kohlhase

University of Houston - Department of Economics ( email )

Houston, TX 77204-5882
United States

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