Jones Act: protectionist policy in the twenty-first century

Jeffrey Pagel, Ike Brannon and Russ Kashian ()
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Jeffrey Pagel: University of Barcelona
Russ Kashian: University of Wisconsin Whitewater

Maritime Economics & Logistics, 2019, vol. 21, issue 4, No 1, 439-463

Abstract: Abstract The Jones Act is a protectionist policy intended to address cabotage, seamen’s rights, and US maritime interests. This study estimates the economic impact of the Jones Act and coastwise restrictions from multiple economic points of view for 2006–2017. The building cost differential between domestic and foreign produced vessels represents a welfare loss to US consumers ranging from $5.2 billion to $6.6 billion, or $59.0 million to $74.6 million per Jones Act vessel. Average daily crew costs make up around 68% of the overall operating costs for domestic ships, compared to 35% for foreign-flagged vessels, and generate an additional per-vessel annual crew cost of $4.1 million, or an estimated annual loss of approximately $383 million for the Jones Act fleet. Differences between domestic and foreign-flagged ship operating costs (which include crew) average $923 million each year, with a total deficit for the entire period of $11.1 billion. Distributing that deficit across state-level imports finds that Texas accounts for $2 billion of the total, followed by Louisiana ($1.8 billion) and California ($1 billion). On a per capita basis, Louisiana is highest at $384, followed by Hawaii ($100). An analysis out of all domestic shipping reveals that Louisiana is again disproportionately disadvantaged. Breaking down the deficit by commodities finds crude petroleum and petroleum products most heavily affected.

Keywords: Jones Act; Maritime policy; Protectionism; Cost–benefit analysis (CBA) (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1057/s41278-019-00123-9

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