Iceberg transport cost model

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The iceberg transport cost model is a simple economic model of transportation costs. It is based on the idea of paying the cost of transporting a good with a portion of the transported good, rather than any other resources. The model is attributed to Paul Samuelson's 1954 article in Deardorffs' Glossary of International Economics.[1] Paul Krugman's 1991 paper in the Journal of Political Economy is one of many significant papers employing the model.