Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/270958 
Year of Publication: 
2023
Series/Report no.: 
Ruhr Economic Papers No. 1013
Publisher: 
RWI - Leibniz-Institut für Wirtschaftsforschung, Essen
Abstract: 
Large cities (central places) excessively export to smaller cities in their surrounding hinterland. Using Japanese inter-city trade data, we identify a substantial centrality bias: Shipments from central places to their hinterland are 50%-125% larger than predicted by gravity forces. This upward bias stems from aggregating across industries, which are hierarchically distributed across large and small cities, and therefore does not arise in sectoral gravity estimations. When decomposing the centrality bias along the margins of our data, we find that the by far largest part of this aggregation bias can be attributed to the extensive industry margin.
Subjects: 
Inter-city trade
central place theory
gravity equation
aggregation bias
JEL: 
C43
F10
F12
F14
R12
Persistent Identifier of the first edition: 
ISBN: 
978-3-96973-179-6
Document Type: 
Working Paper

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