Resource Center

Advanced Search
Technical Papers
Working Papers
Research Memoranda
GTAP-L Mailing List
GTAP FAQs
Educational Materials
CGE Books/Articles
Important References
Submit New Resource

GTAP Resources: Resource Display

GTAP Resource #1152

"Time as a Trade Barrier"
by Hummels, David


Abstract
International trade occurs in physical space and moving goods requires time. This paper examines the importance of time as a trade barrier, estimates the magnitude of time costs, and relates these to patterns of trade and the international organization of production. Estimates indicate that each additional day spent in transport reduces the probability that the US will source from that country by 1 – 1.5 percent. Conditional on exporting country, estimates directly identify a willingness-to-pay for time savings using variation across exporters and commodities in the relative price / speed tradeoff for air and ocean shipping. Each day saved in shipping time is worth 0.8 percent ad-valorem for manufactured goods. Relative declines over time in air shipping prices make time-savings less expensive, providing a compelling explanation for aggregate trade growth, compositional effects in trade growth, as well as growth in time-intensive forms of integration such as vertical specialization. Specifically, the advent of fast transport (air shipping and faster ocean vessels) is equivalent to reducing tariffs on manufactured goods from 32% to 9% between 1950-1998.


Resource Details (Export Citation) GTAP Keywords
Category: GTAP Application
Working Paper
Status: Not published
By/In: GTAP Working Paper No. 18
Date: 2001
Version:
Created: Conner, J. (12/20/2002)
Updated: Batta, G. (11/14/2006)
Visits: 24,744
- Trade in services


Attachments
If you have trouble accessing any of the attachments below due to disability, please contact the authors listed above.


Public Access
  File format GTAP Working Paper No. 18  (201.4 KB)   Replicated: 0 time(s)


Restricted Access
No documents have been attached.


Special Instructions
No instructions have been specified.


Comments (0 posted)
You must log in before entering comments.

No comments have been posted.