Abstract
In a recent article in this Journal, Professor Cassing [19781 attempts to integrate transport costs into the H. 0. S. model and then to contrast this model with a nontraded goods model incorporating elements of jointness in consumption. Cassing concludes, resulting from the analysis in Section IV, that in the nontraded goods model the Stolper-Samuelson theorem is unchanged with respect to traded goods, while in the H. 0. S. model with transport costs, however, the theorem is not unscathed. This result is seemingly striking but misleading. The purpose of this note is to show that Cassing's analysis is incomplete and that his result is valid only if the capital intensity assumption on the transport industry is unreasonably made. The model and notation we use are the same as in Cassing. For the sake of convenience, let us reproduce equations (3.3), (3.4), and (3.5) in Cassing's paper as follows:
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