We rely on the economic theory approach to index numbers to improve the existing definitions and decompositions of variations in generalized transport costs (GTCs). As a value index, we decompose GTCs into price and quantity indices associated to economic—market—costs and infrastructure variables—distance and time within a network. The methodology allows the accurate identification of the sources of GTCs decline. We illustrate it for the case of road freight transportation in Spain between 1980 and 2007 and at a highly detailed geographical level. Average GTCs weighted by trade flows have decreased by 16.3%, with infrastructure driving that reduction. We find large territorial disparities in GTCs, but also significant geographical clusters where the market and network indices show spatial association.

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doi.org/10.1016/j.tra.2014.06.009, hdl.handle.net/1765/130926
Networks and Spatial Economics
Department of Technology and Operations Management

Gallego, N., & Zofio Prieto, J. (2018). Trade Openness, Transport Networks and the Spatial Location of Economic Activity. Networks and Spatial Economics, 18(1), 205–236. doi:10.1016/j.tra.2014.06.009