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

We develop a methodology to accurately compute transport costs.Based on the real transport network, our measure encompassesthe characteristics of infrastructure, vehicle and energy used,as well as labor, insurance, tax and general charges borne bytransport carriers. Computed for the 341 French employment areas,road transport shipments and the period 1978–1998, thisnew measure is compared to alternative ones such as great circledistance, real distance, or real time. We conclude that theseproxies do a very good job in capturing transport costs in cross-sectionanalysis. However, important discrepancies limit the possibilityof using them in time series analysis. Moreover, our measureallows us to identify the policies that most impact transportcosts. We show that transport technology and market structureare responsible for most of the transport cost decrease. Infrastructureimprovements only condition the spatial distribution of thegains. Finally, some implications for researchers and regionalpolicy makers are derived.