2022 Frisch Medal Awarded
The Econometric Society is pleased to announce that the 2022 Frisch Medal selection committee consisting of Marianne Bertrand (chair), Steven Berry, Igal Hendel, Kate Ho, and Stephen J. Redding has awarded this year’s Frisch Medal of the Econometric Society to Giulia Brancaccio, Myrto Kalouptsidi, Theodore Papageorgiou for their paper, "Geography, Transportation, and Endogenous Trade Costs”, (Econometrica, Vol. 88, No. 2, March 2020, 657-691).
First awarded in 1978, the Frisch Medal is presented biennially for the best applied (empirical or theoretical) paper published in Econometrica in any of the volumes corresponding to the four calendar years immediately preceding the year in which the award is made according to the procedures stated in https://www.econometricsociety.org/society/organization-and-governance/rules-and-procedures#83. The award will be presented by Econometric Society President, Guido Tabellini, on Tuesday, August 23, 2022 at the European Economic Association and European meeting of the Econometric Society at Bocconi University.
The committee wrote the following citation:
“Geography, Transportation, and Endogenous Trade Costs” by Giulia Brancaccio, Myrto Kalouptsidi and Theodore Papageorgiou breaks genuinely new ground in developing a rich quantitative model of the market for transportation services and showing that endogenous transportation costs play a central role in shaping international trade. The paper uses remarkable micro data on the movements of individual vessels and contracts between exporters and shipowners. These data reveal new stylized facts about the market for transportation services, including asymmetries in bilateral transportation costs that are linked to bilateral trade imbalances, and the frequency with which ships travel empty in response to these imbalances. The paper next develops a spatial model that rationalizes these stylized facts in terms of search and matching frictions. This structural model is estimated using the observed data, including a novel application of methods of nonparametric identification to matching function estimation. The estimated model highlights three sets of key interactions between endogenous transportation costs and patterns of international trade. First, endogenous transport costs moderate comparative advantage, as net exporters face higher shipping prices. Second, they dampen the impact of transport cost shocks on trade flows, as endogenous responses in shipping prices result in incomplete passthrough. Third, they introduce network externalities, since as one location becomes a more attractive destination for shipping, this reduces transportation costs for neighboring locations. Overall, the paper provides an outstanding example of the use of theory and data to analyze a new mechanism and trace its general equilibrium implications for the economy as a whole.”