This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

« Back to Results

Topics in Transportation and Trade

Paper Session

Saturday, Jan. 6, 2018 12:30 PM - 2:15 PM

Marriott Philadelphia Downtown, Meeting Room 308
Hosted By: Transportation and Public Utilities Group
  • Chair: Richard Fowles, University of Utah

The Effect of Economic Sanctions on Domestic Production, Trade and Transportation of Sanctioned Goods

Misak Avetisyan
,
Texas Tech University
David Lektzian
,
Texas Tech University

Abstract

It is well established that free trade generates larger gains. However, various forms of export control such as tariffs, quotas, taxes, etc. applied by developed and developing countries may substantially reduce gains from international trade. In this paper we apply a unique methodological refinement of the computable general equilibrium (CGE) approach to understand the effect of various types and levels of international sanctions on the severity and dissipation of economic losses over time.

For this purpose, we estimate the direct and indirect effects of differing types and levels of sanctions on the export of restricted goods in targeted economies and the use of international transport using the modified version of the dynamic Global Trade Analysis Project (GTAP) model of global trade. We introduce the substitution between different modes of transport into the dynamic version of the GTAP model using the elasticities and approach developed by Avetisyan et al. (2017). The modal substitution elasticities ranging from of 0.9 to 2.8 generate significant response to changes in the relative price of different modes of goods transport.

The Resilience of International Trade: Evidence from Hurricane Katrina

Felix Friedt
,
University of Oregon

Abstract

As evidenced by recent Hurricanes Harvey, Irma and Maria, natural disasters are omnipresent, increasing in their destructive force and potentially devastating for local or even regional economic activity. In this study, I analyze the dynamics and spatial distribution of the trade effects resulting from natural disasters. I develop a spatial framework of international trade and apply the resulting spatial econometric model to monthly U.S. port-level trade data. Contributing to the existing literature, I estimate the dynamic evolution of trade effects caused by Hurricane Katrina differentiating these disruptions at the local port level. The estimates point to the static and dynamic resilience of international trade. While ports closest to Katrina's epicenter experience significant short-run reductions, international trade handled by nearby ports rises in response to this disaster. Moreover, the estimates are the first to point to the permanence of the disaster-induced trade disruptions causing persistent increases in trade at the port of Panama City eight years post treatment. Distance to Katrina's epicenter is estimated to be the primary determinant of the counteracting short-run and long-run trade effects and exports are shown to be more sensitive to this distance than imports. Overall, the analysis illustrates the potential disparity between aggregate and local trade effects and underlines the significance of infrastructure networks to reduce the devastation inflicted by natural disasters.

Air Cargo Market Structure, Intermodal Competition, and Prices: Evidence From Chinese Imports From Europe

Volodymyr Bilotkach
,
Newcastle University
Bo Gao
,
Newcastle University
W. Grimme
,
Newcastle University
S. Maioli
,
Newcastle University

Abstract

While about one third of international trade by value is shipped by air; the air cargo market itself remains understudied in the academic literature. This work starts filling up this gap by examining the impact of air cargo market structure on shipment price and the share of product shipped by air – our measure of the extent of intermodal competition. We address these questions by examining the data on goods imported into China from Europe.

In this study, we take advantage of two datasets. IATA data on air cargo shipments allows us to observe the volumes of cargo shipped by air between different airports; we use this dataset to compute the HHI-type measure of air cargo accessibility at the European country – Chinese airport level. Our transactional import quantities and prices come from the Chinese Customs Trade Database for 2004-2006, collected by the General Administration of Customs of China. This database reports import (and export) transactional values and quantities by product-firm-importing country (destination country for exports) at a monthly frequency. The database also reports the port that each transaction is declared to. We use this information to link the trade data with air cargo accessibility calculated from air cargo data. For every transaction, this database also reports the modes of shipment, including by air, highway, railway, sea and post. We use this information to construct variables of firm importing behaviour, e.g. share of import by air and ratio between price by air and price by other shipment modes.

Disaster Adaptation Investments With Inter- and Intra-port Competition and Cooperation

Kun Wang
,
University of British Columbia
Anming Zhang
,
University of British Columbia

Abstract

The present study analytically investigates the adaptation investments made by two landlord ports with each severing their respective captive markets while competing for common hinterland. Each port consists of a port authority that is either publicly owned (with an objective of welfare maximization) or privately owned (with profit maximization as its objective), and a private terminal operator. We examine the impacts of inter-port and intra-port competition and cooperation on port adaptation investments, as well as the ownership impacts. More specifically, the study investigates the following questions: i) How does the uncertainty of disaster occurrence probability affect port adaptations? ii) Does port competition increase or decrease the port adaptations (i.e., any “competition effect”)? iii) Is there a free riding on adaptation investments between the port authority and the terminal operator; if so, will their cooperation reduce such free riding? iv) Does public ownership of a port authority raise the adaptation; if so, is such adaptation investment socially efficient?

Multi-part Price Structures in Less Than Truckload Freight

Angela Yan Du
,
Fort Hays State University
Steven Buccola
,
Oregon State University

Abstract

The U.S. LTL (less-than-truckload) industry, in which goods of unrelated business
customers are shipped together, has received less attention than its significance deserves.
An important feature of trucking since the 1980 deregulation has been multi-part pricing.
In the LTL sector for example, a freight bill typically includes three components: (a) a base
charge for essential capital and labor inputs; (b) a premium for accessory services, and (c)
a surcharge for fuel-related costs.
Discussant(s)
Aselia Urmanbetova
,
Georgia Institute of Technology
Patrick McCarthy
,
Georgia Institute of Technology
Bryan Weber
,
College of Staten Island
Wayne Talley
,
Old Dominion University
James Peoples
,
University of Wisconsin-Milwaukee
JEL Classifications
  • R4 - Transportation Economics
  • F0 - General