Lumber Transport and the Jones Act: A Multicommodity Spatial Equilibrium Analysis

This article examines the impact of current coastal trade restrictions on American intercoastal lumber shipping. The nature of U.S. maritime regulation is briefly reviewed and a model is developed to quantify its effect on lumber shipments, shipping costs, and economic welfare. It is found that the aggregate cost reductions and welfare gains resulting from deregulation will most likely be of little significance. Regional welfare redistributions will be fairly substantial however, as lower transport rates significantly alter the pattern of intercoastal shipments and allow Northwest U.S. producers to capture a large share of the Northeast market from their Canadian competitors.