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Institutional Affiliation: Economics Dept., University of Minnesota
NBER Working Papers and Publications
|April 2018||Indivisibilities in Distribution|
with Thomas J. Holmes: w24525
This paper develops and estimates a model of indivisibilities in shipping and economies of scale in consolidation. It uses highly detailed data on imports for which it is possible to observe the contents of individual containers. In the model, a firm is able to adapt to indivisibility constraints by using consolidation strategies, and by determining how dense to make its distribution network in both space and time. Indivisibilities are found to create significant scale economies in distribution.