Iceberg transport cost model

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The iceberg transport cost model is a commonly used, simple economic model of transportation costs. It relates transport costs linearly with distance, and pays these costs by extracting from the arriving volume. The model is attributed to Paul Samuelson's 1954 article in Deardorffs' Glossary of International Economics.[1] Paul Krugman's 1991 paper on Economic Geography[2] is one of the more widely cited papers employing the model.


  1. ^ Alan Deardorff's Glossary of International Economics
  2. ^ Krugman, Paul(1991) "Increasing returns and economic geography". Journal of Political Economy Vol. 99, No.3 (June 1991)

External links[edit]

  • Samuelson, Paul (1954). "The Transfer Problem and Transport Costs, II: Analysis of Effects of Trade Impediments". Economic Journal. 64 (254): 264–289. doi:10.2307/2226834.