International transport costs: new findings from modeling additive costs

Abstract International transport costs do have an additive part. How large is it? Does it matter? This article provides new answers to these questions. Using information contained in the US imports flows from 1974 2019, we develop empirical model that disentangles ad-valorem and components of international costs. The per-unit component represents a sizeable share total costs, between 30% 45% depending on year mode considered. We then investigate important consequences under two different perspectives. First, modeling varying modifies decomposition time trend reduction ‘pure’ trade composition effects, latter playing minor role. Second, revisit welfare gains cost presence In this regard, shed light variations induced by acceleration ‘hyper-globalization’, as well key role determining those variations. Neglecting substantially underestimates decrease.