Transportation Costs in Archipelagos: Evidence from Indonesia

This paper empirically examines the effects of domestic transportation costs on product prices in an archipelagic country, namely, Indonesia. Specifically, we investigate the province‐level price of televisions. Our analysis reveals that maritime transportation is more expensive than land transportation. For example, a 1% increase in distance in maritime and land transportation increases the price of televisions by 0.08% and 0.02%, respectively....