Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/296166 
Year of Publication: 
2024
Series/Report no.: 
CESifo Working Paper No. 11077
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Maritime transport has been historically susceptible to piracy. While broad assessments suggest the impact of modern piracy causes large economic losses, the literature lacks quantification of the magnitude of the costs and the behavioral responses that underpin them. Here, we combine theory and a unique geospatial dataset combining more than 25 million shipping voyages and thousands of pirate encounters across the globe to find that pirate encounters lead to significant and costly avoidance measures. Shippers modify their path along a route to avoid locations with known pirate encounters. This increases voyage distance and duration, which lead to significant increases in fuel and labor costs estimated to be over US$1.5 billion/year. Additionally, emission of CO2, NOx, and SOx due to increased fuel consumption results in environmental damages valued at US$5.1 billion per year. Together, our results provide the first global estimates linking the presence of pirates to individual behaviour and aggregate transportation cost, as well as its environmental impact, with major implications for the shipping industry and maritime security at a global scale.
Subjects: 
piracy
shipping
avoidance
JEL: 
Q50
F50
R40
Document Type: 
Working Paper
Appears in Collections:

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.