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Journal of Economic Geography Advance Access originally published online on February 14, 2005
Journal of Economic Geography 2005 5(3):319-349; doi:10.1093/jnlecg/lbh062
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© The Author (2005). Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oupjournals.org

Transport costs: measures, determinants, and regional policy implications for France*

Pierre-Philippe Combes** and Miren Lafourcade***

** CERAS-ENPC. CNRS researcher also affiliated to CEPR. combes{at}enpc.fr. http://www.enpc.fr/ceras/combes/.

*** Corresponding author at: Université d'Évry (IUT, GLT Department) and CERAS-ENPC. CERAS, 48 Bd. Jourdan, 75014 Paris, France. Fax: 33 1 43 13 63 82. lafourca{at}enpc.fr. http://www.enpc.fr/ceras/lafourcade/

We develop a methodology to accurately compute transport costs. Based on the real transport network, our measure encompasses the characteristics of infrastructure, vehicle and energy used, as well as labor, insurance, tax and general charges borne by transport carriers. Computed for the 341 French employment areas, road transport shipments and the period 1978–1998, this new measure is compared to alternative ones such as great circle distance, real distance, or real time. We conclude that these proxies do a very good job in capturing transport costs in cross-section analysis. However, important discrepancies limit the possibility of using them in time series analysis. Moreover, our measure allows us to identify the policies that most impact transport costs. We show that transport technology and market structure are responsible for most of the transport cost decrease. Infrastructure improvements only condition the spatial distribution of the gains. Finally, some implications for researchers and regional policy makers are derived.

Keywords: trade costs, infrastructure, Geographic Information System (GIS), regional development, shift-share analysis,
JEL classifications: C81, H54, L92, R58
* We are grateful to Malik Béchar and André-Pierre Surineau (The MVA Consultancy), Christophe Bodard (SETRA), Jérôme Carreau (Atlas Concept), Marie-Pierre Allain and Emeric Lendjel (CNR), Laurent Gobillon, François Lebrun, Frédéric Leray, Jean-Claude Meteyer (SES-DAEI) and Jean-Pierre Roumegoux (INRETS) for their critical help in gathering data. We also acknowledge Laurence Demeulenaere, Lionel Fortin, David Meunier, Emile Quinet, Alain Sauvant and other participants to the economic seminar of the French Ministry of Transports for helpful comments. We also thank three anonymous referees, Gilles Duranton, Philippe Martin, Thierry Mayer, Henry Overman and Diego Puga for very fruitful suggestions and discussions. This paper is produced as part of a CEPR Research Network on ‘The Economic Geography of Europe: Measurement, Testing and Policy Simulations’, funded by the European Commission under the Research Training Network Programme (Contract No: HPRN-CT-2000-00069). Financial support from SES-DAEI and from NATO (Combes' advanced fellowship grant) are also gratefully acknowledged, as well as the hospitality of the economics department at Boston University.

Date submitted: 21 May 2003     Date accepted: 30 July 2004


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