The economic importance of the Straits of Malacca and Singapore: An extreme-scenario analysis

Xiaobo Qu and Qiang Meng

Transportation Research Part E: Logistics and Transportation Review, 2012, vol. 48, issue 1, 258-265

Abstract: This paper proposes a decision tree model to estimate the loss to global economy on the hypothesis of an extreme scenario of blockade of the Straits of Malacca and Singapore. The insurance surcharges, inventory costs and the time values of cargoes, and Time Charter Equivalent rate are used to estimate the psychological loss, the loss to industries, and the loss to carriers, respectively. Interestingly, there is a pseudo-paradoxical phenomenon with respect to the loss to carriers. An illustrative example is also provided to explain the “Malacca Paradox”.

Keywords: Blockade; The Straits of Malacca and Singapore; Discrete choice model; Malacca Paradox (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:transe:v:48:y:2012:i:1:p:258-265

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DOI: 10.1016/j.tre.2011.08.005

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