The Jones Act

The Jones Act requires ships carrying cargo between two American ports to be American built, American owned, American manned and American flagged.

We aim to raise at least an additional $40,000 to fund two studies, one a gravity model of all domestic and international trade, and one focused case study on California agricultural goods, to robustly estimate and demonstrate the costs of this policy.

While protectionist laws around shipping are common, the Jones Act is uniquely restrictive – maybe the most most restrictive among all OECD countries. The result: despite 40% of the US population living in coastal counties and our two enormous coasts, under 4% of domestic freight is transported by ship.

Balsa Research believes that this has tremendous impacts on commerce, the economy, and the environment. However, the Jones Act's century-long enforcement has so profoundly shaped American maritime policy and infrastructure that assessing its true impact through counterfactuals is exceptionally challenging. This entrenched policy has created a status quo that's difficult to see beyond, making rigorous economic analysis all the more crucial.

Our Call For Research

Building on this understanding, earlier this year, Balsa Research put out a call for economists to work with us on assessing the cost of the Jones Act. We know that the findings of robust academic studies matter to legislators and key interest groups, and our ultimate goal is to deliver credible studies with legible, practical policy proposals.

An internal literature review had revealed a landscape dominated by policy analyses from wonks and legal scholars – nuanced and well-argued, but often lacking in hard numbers. The few economic analyses we encountered were generally limited in scope, focusing on specific fields and impacts without grappling with the broader implications for the US economy as a whole.

To address this gap, we've received two promising proposals that take different yet complementary approaches:

1. Macro-level Trade Impact Model: This ambitious proposal aims to construct a large-scale detailed gravity model of domestic and international trade flows across the complex network of routes, evaluating the Jones Act's comprehensive impact on US trade patterns. This will create a "gains from trade" view of the Act and its potential repeal. By comparing the current constrained system with a hypothetical unconstrained one within this model, the study will estimate the hidden costs and inefficiencies introduced by the Jones Act.
2. the Jones Act’s impact on US petroleum marketsMicro-level Agricultural Commodity Analysis: This focused study proposes to examine the impact of the Jones Act on U.S. domestic agricultural trade, with a particular emphasis on California-produced goods, aiming to pinpoint the exact impact of the Jones Act on on the mode and cost of transportation and importantly carbon emissions. Similar to the methodology used in a recent paper on he Jones Act’s impact on US petroleum markets, this granular analysis will provide concrete, quantifiable evidence of the Act's effects. By focusing on a specific sector and nailing down all the concrete details, this research could offer valuable hard data to support broader reform efforts and be extended by further research.

Both of these approaches have the potential to significantly advance our understanding of the Jones Act's economic impact. By funding both studies, we can create a powerful, multi-faceted case for Jones Act reform.

Balsa Research now faces a pivotal decision. We can comfortably fund one of these studies, but we believe funding both would provide a stronger argument for the Jones Act's impact.

The Fundraising Goal

To comfortably fund both studies, we need to raise an additional $40,000. This amount would allow us to support both research teams adequately.

Timeline

Due to how the academic calendar functions, we have a relatively short window – about a month – to secure this funding. Researchers are planning their upcoming academic year, and we need to confirm our support soon to ensure their commitment.

The Impact

We're not promising overnight policy change. The Jones Act has persisted for a century, and shifting such entrenched legislation is a gradual process. However, we believe these studies can meaningfully contribute to the ongoing debate by providing solid, quantitative evidence where it's currently lacking.

If you value evidence-based policy and see the potential in this research, we invite you to contribute. Every donation, regardless of size, brings us closer to funding both studies and enhancing the policy conversation around the Jones Act.