Distance Deterrence and Commodity Values

Abstract

This paper tests a number of hypotheses relating commodity values, relative transport costs, and the severity of distance deterrence, by use of data from a survey of consignment movements to and from industrial establishments. The basic results confirm the significance of the value–weight ratio in determining variations between commodities. The relationship is much weaker than hypothesised, however, which implies that transport accounts for only a small fraction of distance costs. Further analyses point to the importance of factors associated with the particular plants concerned, such as size of firm or regularity of demand.