ABSTRACT
This chapter develops a simple economic model to describe why the transportation cost is important when we analyze waste trade. There is not so much in the area of the waste trade and recycling except the seminal works by Slade. It is usually very hard to obtain transportation costs, but in trade data sets, it is feasible to derive a kind of transportation cost. When a good is exported, the value of the transaction is recorded by the exporting country in the manner of Free on Board (FOB), which includes only the goods own value as a commodity and excludes all fees for ocean transportation, tariff, and insurance. South Korea in ferrous scrap and Hong Kong in plastic scrap are similar to China in import rates, but China is a dominant importer from them, as well. One of the reasons might the time lag between the day the contract was actually made and the real transaction of the cargo.
