Derived demand for refrigerated truck transport: a gravity model analysis of Canadian pork exports to the United States.

摘要

Gravity models have a long history in the empirical analysis of trade flows and market penetration, but lack a strong economic foundation. This paper demonstrates that the gravity model can be reconciled with existing economic theory within the framework of an interregional trade model. An empirical gravity model of interregional trade is specified for Canadian pigmeat exports to the USA, 1992-96. The estimated results demonstrate that the volume of pigmeat exports to the USA is very sensitive to changes in transport costs. With an elastic demand for transportation, a reduction in transport costs increases total revenue for transport companies in Canada. This suggests that pigmeat producers and truckers have a mutual interest in exploring means tolower freight costs. Finally, the gravity model is used to identify potential markets for each of the five major exporting provinces. The Canadian pigmeat industry has its best opportunity for further penetration in Illinois, Texas, New York and New Jersey.