Transportation sensitivity and regional growth

Transportation sensitivity differs considerably among industries within a region. The magnitude of difference is due to unequal comparative positions within the region, the market structure of the industry, and the attributes of the product. The divergency of transportation sensitivity among industries and regions calls for an explicit treatment of transportation factors in a general economic analysis; especially in regional planning.Both the value added and transfer cost elasticities are unrelated to the value of the commodity and bear a limited association with the ratios of value added to gross output. The common practice of using the ratio of transfer to processing costs as a measure of transfer cost sensitivity in location analysis is only a special case of the generalized measure of the (line haul) transfer cost sensitivity assuming that each industry in a region attains a same percentage change in transfer costs.Due to data limitation, the results presented here should be described as studies in the workability of the proposed models. A more critical analysis of the available data and the results following from the models are necessary before a final judgment can be reached.