We propose and apply a new theory-consistent algorithm, which uses disaggregated inter-city trade data to identify a … this upward bias results from aggregation along the extensive industry margin, which is why the bias is much smaller and … only marginally significant if estimation is conducted in a theory-consistent way at the disaggregated industry level. …

We propose and apply a new theory-consistent algorithm, which uses disaggregated inter-city trade data to identify a … this upward bias results from aggregation along the extensive industry margin, which is why the bias is much smaller and … only marginally significant if estimation is conducted in a theory-consistent way at the disaggregated industry level. …

Proper measurement and aggregation of trade costs is of paramount importance for sound academic and policy analysis of …. The objectives and main contributions of this project are to offer guidance for proper measurement, aggregation, and …