Cited by 2,524Global trade and economicsGlobal Trade and CompetitivenessEconomic and Technological Innovation

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Trade Costs

Anderson, James E, van Wincoop, Eric·2004·Journal of Economic Literature

DOI 10.1257/0022051042177649

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Abstract

This paper surveys the measurement of trade costs: what we know and don't know but may usefully attempt to learn. Partial and incomplete data on direct measures of costs go with inference on implicit costs from trade flows and prices. Total trade costs in rich countries are large. The ad valorem tax equivalent is about 170 percent when pushing the data hard. Poor countries face even higher trade costs. There is a lot of variation across countries and across goods within countries, much of which makes economic sense. In our survey, theory provides interpretation and perspective and suggests improvements for the future. Some new results are presented to properly apply and interpret gravity theory and handle aggregation.

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Authors: Anderson, J. E., & van Wincoop, E.
Affiliations: Boston College (US)
National Bureau of Economic Research (US)
ORCID: Anderson, James E
Venue: Journal of Economic Literature
Publisher: American Economic Association
Published: 2004-08-01
Volume: 42
Issue: 3
Pages: 691-751
ISSN: 0022-0515 (ISSN-L)
DOI: 10.1257/0022051042177649
OpenAlex: W4249920418
Cited by: 2,524
References: 55
Citations by year: 2026: 152 · 2025: 147 · 2024: 130 · 2023: 142 · 2022: 152 · 2021: 133 · 2020: 128 · 2019: 97 · 2018: 115 · 2017: 123 · 2016: 126 · 2015: 112 · 2014: 120 · 2013: 106 · 2012: 120
FWCI: 117.73
Type: journal article
Language: en
Open access: closed
Locations: Journal of Economic Literature (publishedVersion)
RePEc: Research Papers in Economics (submittedVersion)
Topics: Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Global trade and economics
Social Sciences › Business, Management and Accounting › Strategy and Management › Global Trade and Competitiveness
Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic and Technological Innovation
Keywords: trade costs, gravity model, aggregation, cross-national variation, low-income countries, international trade flows, price

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