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Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/52420
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| Title: | | Determining optimal transit charges: The Kiel Canal in Germany  |
| Authors: | | Heitmann, Nadine Rehdanz, Katrin Schmidt, Ulrich |
| Issue Date: | | 2011 |
| Series/Report no.: | | Kiel Working Papers 1741 |
| Abstract: | | The Kiel Canal in Germany connects ports on the Baltic Sea with the rest of the world and is the most-used artificial waterway in the world. Despite this fact, it generates a balance sheet loss. Revenues, which are mainly generated by the transit charge, do not cover its operating expenses. This situation raises the question: What reforms could be made to make the canal generate a balance sheet profit? In this paper, we focus solely on the canal's revenue. Because the canal is a monopoly that allows, in principle, for perfect price discrimination, we contrast the current charging system with an optimal charging system based on the willingness-to-pay (WTP) approach. We devise a general approach to calculate optimal transit charges and apply it in a case study that includes four different ship types. We conclude that much higher revenues could be generated, on the order of between $5 and $45 million more per year and ship type if the transit charge were based not only on ship size but also on a ship's departure and destination ports. |
| Subjects: | | optimal transit charge Kiel Canal shipping cost Germany price discrimination |
| JEL: | | R48 L92 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Publikationen von Forscherinnen und Forschern des IfW Economists Online Kieler Arbeitspapiere, IfW
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