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The effect of transportation rates on interregional competition in agriculture: A general case

Author

Listed:
  • James W. Dunn

    (Associate Professor of Agricultural Economics, Pennsylvania State University)

  • David R. Lee

    (Assistant Professor of Agricultural Economics, Cornell University)

  • Daymon W. Thatch

    (Associate Professor of Agricultural Economics, Rutgers University)

Abstract

A general model for spatially separated markets is used to find the effects of transportation rates on interregional competition in agriculture. The results show that producers are affected much more than consumers, especially producers in the importing region. The solution is sensitive to the elasticity of supply, especially in the importing region. The elasticity of demand has little effect on the solution. The self-sufficiency ratio is not particularly important, but the size of both the transportation price and the farm price relative to the retail price is quite important. In general, the farmers in the importing region are quite sensitive to transportation prices.

Suggested Citation

  • James W. Dunn & David R. Lee & Daymon W. Thatch, 1987. "The effect of transportation rates on interregional competition in agriculture: A general case," Agribusiness, John Wiley & Sons, Ltd., vol. 3(4), pages 393-402.
    • Handle: RePEc:wly:agribz:v:3:y:1987:i:4:p:393-402
    DOI: 10.1002/1520-6297(198724)3:4<393::AID-AGR2720030405>3.0.CO;2-D
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    Cited by:

    1. Run Yu & Ping Leung, 2012. "The economic implication of rising transport cost for a small open economy: a case study of Hawaii’s vegetable sector," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 48(3), pages 855-875, June.

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