The effects of financial incentives on vessel speed reduction: Evidence from the Port of Long Beach Green Flag Incentive Program
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We analyze the efficacy of using dockage-fee discounts as an incentive for oceangoing vessel operators to comply with the Vessel Speed Reduction programs of seaports, such as those implemented at the ports in Long Beach, Los Angeles, San Diego, New York and New Jersey. On the basis of unique data from the Port of Long Beach’s program, we find that discounts are indeed effective, and that those effects vary considerably by operator type, suggesting a role for differentiated pricing strategies to better motivate compliance. We also develop a novel method for exploiting those data to estimate the value of time for vessel operators, with estimates ranging from US$268 to $759 per hour. Our findings are obtained from a discrete-choice model for panel data that estimates how the probability of compliance is influenced by potential dockage-fee savings and speed-reduction delays, and by the characteristics of operators and their vessels. That model also reveals the tradeoffs those operators make between time and money, from which we derive our value of time estimates.
Keywordsmaritime transportation port policy ship emissions slow steaming value of time
The authors would like to thank Alison Linder, Genevieve Giuliano, Victoria Valentine Deguzman and participants of the METRANS Transportation Center Research Seminar at the University Southern California for helpful comments and suggestions. They are especially indebted to Rafael Delgado, Valerie Martin and the Port of Long Beach for providing data and insights about the port’s Green Flag Incentive Program and thank California State University, Long Beach for supporting this research through a Research, Scholarly and Creative Activities award. Finally, they are extremely grateful to the reviewers and the editor for their high-quality comments and suggestions that have substantially improved this article.
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