Transport Costs and the Size of Cities : the Case of Russia

Real costs of freight transportation have strong increased in Russia particularly during the period of price liberalization 1992--93. This paper investigates possible connections between rising transport costs and the evolution of the size structure of the system of cities in the Russian Federation and its federal subjects. Empirical findings suggest that under conditions of a closed system agglomeration processes according to the predictions of the model of Tabuchi, Thisse and Zeng (2005) would have taken place especially in the periphere regions of the North and Far East.