Handbook of Regional and Urban Economics

This chapter provides an overview of the state-of-the-art in international and inter-regional freight demand modelling. It pays particular attention to the differences between the theoretical and empirical literature as well as pros and cons of the existing methodologies. We further focus on the three main approaches to modelling of the freight transport demand including gravity model, the IO framework and spatial general equilibrium modelling. Each of these methodologies is explained in detail and the implementation challenges are discussed. In the concluding part of the chapter we present our view on the future research agenda in the field of gravity and spatial general equilibrium modelling.