Summary of: Gutberlet, Theresa. "Cheap Coal versus Market Access: The Role of Natural Resources and Demand in Germany’s Industrialization." Working Paper. Presented on Mar. 11, 2013 in an Economic History class

1. The Role of Natural Resources and Demand
in Germany’s Industrialization
By Theresa Gutberlet
Presented by Michael Kirmes

8. FE

19. 11.2
4.65
3.42
3.02
4.5
1.6 1.55
0.97
1.61 1.53
1.21 1.05
0
2
4
6
8
10
12
1846 1861 1875 1882
Average Freight Rates (Pfg. / tonkm)
Railroads
Waterways
Ocean
Roads: 40Pfg / tonkm
Transshipment: 50 Pfg.

20. 𝜋𝑙𝑖𝑡 = 𝛽1 𝑚𝑎𝑟𝑘𝑒𝑡𝑖𝑡 + 𝛽2 𝑐𝑜𝑎𝑙𝑖𝑡
𝐴,𝐵
+ 𝛽3 𝑙𝑖𝑔𝑛𝑖𝑡𝑒𝑖𝑡
𝐴,𝐵
+ 𝛽4 𝑖𝑟𝑜𝑛𝑜𝑟𝑒𝑖𝑡
𝐴,𝐵
+Γ𝑔 + 𝜏 𝑡 + Γ𝑔 × 1 𝑡 𝐸𝑚𝑝𝑖𝑟𝑒 + 𝜉𝑖𝑡 + 𝜖𝑙𝑖𝑡
𝑗=1
𝐽
1
𝐶𝑖𝑗𝑡
× 𝑃𝑗𝑡
max
𝑗
1
𝐶𝑖𝑗𝑡
1𝑗𝑡 Coal output > 10,000 tons
𝑗=1
𝐽
1
𝐶𝑖𝑗𝑡
Coal output 𝑗𝑡
A
B
Pr 𝑙 ∈ 𝐿𝑖𝑡 = Pr 𝜋𝑙𝑖𝑡 > 𝜋𝑙𝑗𝑡 = Pr 𝛿𝑖𝑡 − 𝛿𝑗𝑡 > 𝜖𝑙𝑗𝑡 − 𝜖𝑙𝑖𝑡
= 𝛿𝑖𝑡 + 𝜖𝑙𝑖𝑡

21. 𝐶𝑖𝑗𝑡
𝐼𝑉
= 𝐷𝑖𝑗 ×
1
Network 𝑡
𝑚𝑎𝑟𝑘𝑒𝑡𝑖𝑡
𝐼𝑉
=
𝑗
1
𝐷𝑖𝑗
× Network 𝑡 × 𝑃𝑗,𝑡−26