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Abstract
Transportation costs between production regions affect
interregional competitive relations. Rising fuel costs have substantially
changed the transfer cost function for motortruck transport. A method for
estimating the direct impact on consumer and producer prices of fuel cost
increases is presented . Example computations are made for long distance
transport of vegetables, eggs, meat, and milk to illustrate the methodology.
The implication of markup procedures by marketing firms on consumer
prices is shown. Differential impacts on producers depend on the type of
food product and scale of operation in New England. Impacts on consumer
food budgets are suggested .