The influence of transportation improvements on interregional trade in Brazil

In this study the impact of transportation improvements on Brazilian interregional commodity flows are considered. The decreasing friction of distance is measured by two variants of the gravity model. First, distance coefficients are calculated for trade among all states in 1942 and 1962. Second, distance coefficients for each state's imports are calculated separately and then related to state per capita income, for the year, 1962. Both the time-series and cross-section results indicate a significant diminution in the friction of distance in the course of Brazilian development. The degree to which trade has integrated the national economy is assessed by the convergence of agricultural prices. Not only have interregional price differentials tended to diminish, but regional price structures are becoming more similar. The interrelation of these price structures provides a method of regionalizing the Brazilian space-economy.Most of the data for this study were collected during the author's tenure as Ford Foundation Visiting Professor at Instituto de Pesquisas Economicas, Universidade de Sao Paulo, Brazil. The Milton Fund and the Department of City and Regional Planning, both of Harvard, sustained the completion of this research. Milton Campanario and Abby Rashid provided invaliable assistance in assembling the data. Jeffrey Dutton of the Harvard Laboratory for Computer Graphics provided a program for calculating distances. William McAuliffe suggested some imaginative interpretations of the factor analysis.