DP9309 Geography and Intra-National Home Bias: U. S. Domestic Trade in 1949 and 2007

Author(s): Nicholas Crafts, Alex Klein
Publication Date: January 2013
Keyword(s): gravity equation, intra-national home bias, manufacturing belt, spatial clustering
JEL(s): F14, N72
Programme Areas: International Trade and Regional Economics, Economic History
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=9309

This paper examines home bias in U. S. domestic trade in 1949 and 2007. We use a unique dataset of 1949 carload waybill statistics produced by the Interstate Commerce Commission and 2007 Commodity Flow Survey data. The results show that home bias was considerably smaller in 1949 than in 2007 and that home bias in 1949 was even negative for several commodities. We argue that the difference between the geographical distribution of manufacturing activities in 1949 and that of 2007 is an important factor explaining the differences in the magnitudes of home-bias estimates in those years.