IDEAS home Printed from https://ideas.repec.org/a/spd/journl/v64y2014i4p39-66.html

The Liberalization process of the Ferry System in Greece, 2001-2014 (August): What are the benefits to users of Aegean Sea Transportation?

Author

Listed:
  • Alexander M. Goulielmos

    (Department of Maritime Studies, Professor Emeritus, University of Piraeus, 85 Karaoli and Dimitriou St., Piraeus 18536, Greece)

  • Ioannis M. Sitzimis

    (Technical University of Crete, Post-doc, School of Production Engineering & Management, Kunupidiana of Cape, Chania 73100)

Abstract

The great deficits created in the pursuit of the Keynesian welfare state led to governmental failure. This increasingly posed a greater risk to financial system than market failure, due to the increasing scale effects. Competition ceases to exist. The operations of markets first described by Adam Smith (1776) and confirmed by Alfred Marshall (1920). As a result of the increasing risk of governmental failure, legal barriers to ‘entry’ removed (liberalization) and private ownership promoted (privatization). Here, we investigate the impact of the ‘liberalization processes of (private)’ ‘Aegean Ferry System’ since 2001, and look at the effect on passenger fares and private cars freight rates under ‘free entry’. Quality of service was never regulated…We showed the existence of increasing returns to scale in the ferry system and in the individual ship, basing our arguments on empirical data and on theory. The fixed cost of the ferry system is 68%, indicating failure of the ferry market, when prices had to be determined by marginal cost leading to operational losses, since average cost is twice greater than marginal cost. Despite the hopes of the users that Greek Aegean ferry system’s liberalization would lead to reduction in fares and freight rates, this did not happen. Reforms paralleled those in air transport in USA, and a similar “hub and spoke” network system proposed and adopted careless by Greece, following the ÓÅÈÁÌ study. Fares and private car freight rates rose in a series of waves, owners frequently blaming the rising oil prices…

Suggested Citation

  • Alexander M. Goulielmos & Ioannis M. Sitzimis, 2014. "The Liberalization process of the Ferry System in Greece, 2001-2014 (August): What are the benefits to users of Aegean Sea Transportation?," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 64(4), pages 39-66, October-D.
    • Handle: RePEc:spd:journl:v:64:y:2014:i:4:p:39-66
    as

    Download full text from publisher

    File URL: https://spoudai.unipi.gr/index.php/spoudai/article/download/117/207/117-582-1-PB.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Blaug,Mark, 1997. "Economic Theory in Retrospect," Cambridge Books, Cambridge University Press, number 9780521577014, Enero-Abr.
    2. George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
    3. David R. Graham & Daniel P. Kaplan & David S. Sibley, 1983. "Efficiency and Competition in the Airline Industry," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 118-138, Spring.
    4. Alfred E. Kahn, 1988. "The Economics of Regulation: Principles and Institutions," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262610523, December.
    5. Alexander M. Goulielmos * & Androniki Gatzoli, 2004. "An analysis of the pricing system in the Greek--Italian coastal routes," Maritime Policy & Management, Taylor & Francis Journals, vol. 31(4), pages 269-285, October.
    6. Helm, Dieter & Jenkinson, Tim (ed.), 1998. "Competition in Regulated Industries," OUP Catalogue, Oxford University Press, number 9780198292524.
    7. Peter E. Earl, 1995. "Microeconomics for Business and Marketing," Books, Edward Elgar Publishing, number 159, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ioannis Sitzimis, 2021. "An Optimal Forecasting Method of Passenger Traffic in Greek Coastal Shipping," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Democritus University of Thrace (DUTH), Kavala Campus, Greece, vol. 14(3), pages 72-87, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pettus, Michael L. & Kor, Yasemin Y. & Mahoney, Joseph T., 2007. "A Theory of Change in Turbulent Environments: The Sequencing of Dynamic Capabilities Following Industry Deregulation," Working Papers 07-0100, University of Illinois at Urbana-Champaign, College of Business.
    2. Parker, David, 2001. "Economic Regulation: A Preliminary Literature Review and Summary of Research Questions Arising," Centre on Regulation and Competition (CRC) Working papers 30616, University of Manchester, Institute for Development Policy and Management (IDPM).
    3. Nancy L. Rose, 2014. "Learning from the Past: Insights for the Regulation of Economic Activity," NBER Chapters, in: Economic Regulation and Its Reform: What Have We Learned?, pages 1-23, National Bureau of Economic Research, Inc.
    4. Estache, Antonio & Martimort, David, 1999. "Politics, transaction costs, and the design of regulatory institutions," Policy Research Working Paper Series 2073, The World Bank.
    5. Mark L. Burton & David L. Kaserman & John W. Mayo, 2009. "Common Costs And Cross‐Subsidies: Misestimation Versus Misallocation," Contemporary Economic Policy, Western Economic Association International, vol. 27(2), pages 193-199, April.
    6. Nagaj, Rafał, . "Regulacyjna rola państwa na przykładzie polskiego rynku usług telekomunikacyjnych i elektroenergetyki," Gospodarka Narodowa-The Polish Journal of Economics, Szkoła Główna Handlowa w Warszawie / SGH Warsaw School of Economics, vol. 2013(5-6).
    7. Tomaso Duso, 2005. "Lobbying and regulation in a political economy: Evidence from the U.S. cellular industry," Public Choice, Springer, vol. 122(3), pages 251-276, March.
    8. Bahram Adrangi & Kambiz Raffiee, 1997. "Optimization Analysis of the U.S. Aggregate Consumption: A Goodness-of-Fit Approach," The American Economist, Sage Publications, vol. 41(2), pages 62-69, October.
    9. Breuer, Matthias & Le, Anthony & Vetter, Felix, 2023. "Audit mandates, audit firms, and auditors," Working Papers 333, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    10. Kevin Henrickson & Wesley Wilson, 2013. "Voting, Regulation, and the Railroad Industry: An Analysis of Private and Public Interest Voting Patterns," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 43(1), pages 21-39, August.
    11. Gioia Pescetto, 2007. "Regulation and systematic risk: the case of the water industry in England and Wales," Applied Financial Economics, Taylor & Francis Journals, vol. 18(1), pages 61-73.
    12. Martino Maggetti, 2007. "De facto independence after delegation: A fuzzy‐set analysis," Regulation & Governance, John Wiley & Sons, vol. 1(4), pages 271-294, December.
    13. Birke, Franziska, 2007. "Universaldienstregulierung in der Telekommunikation heute: Herausforderungen, Chancen und Risiken ; ein historischer Ansatz," Discussion Papers 114, University of Freiburg, Institute for Transport Economics and Regional Policy.
    14. Rafał Nagaj, 2013. "Regulacyjna rola państwa na przykładzie polskiego rynku usług telekomunikacyjnych i elektroenergetyki," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 5-6, pages 43-67.
    15. Luigi Prosperetti, 2009. "Some regulatory lessons to be drawn from the financial crisis," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 56(3), pages 265-273, September.
    16. Parker, David & Kirkpatrick, Colin, 2002. "Researching Economic Regulation in Developing Countries: Developing a Methodology for Critical Analysis," Centre on Regulation and Competition (CRC) Working papers 30665, University of Manchester, Institute for Development Policy and Management (IDPM).
    17. Mirucki, Jean, 1980. "Vérification des conditions d'efficacité dans la production chez Bell Canada [Checking the conditions of efficient production in Bell Canada]," MPRA Paper 30147, University Library of Munich, Germany, revised Jun 1980.
    18. Lekakou, Maria B., 2007. "Chapter 8 The Eternal Conundrum of Greek Coastal Shipping," Research in Transportation Economics, Elsevier, vol. 21(1), pages 257-296, January.
    19. Babacan, Mehmet, 2012. "The Nature of Lobbying and Regulation in Turkey," MPRA Paper 57830, University Library of Munich, Germany.
    20. Christian Leuz & Peter D. Wysocki, 2016. "The Economics of Disclosure and Financial Reporting Regulation: Evidence and Suggestions for Future Research," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 54(2), pages 525-622, May.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • R49 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spd:journl:v:64:y:2014:i:4:p:39-66. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SPOUDAI Journal of Economics and Business (email available below). General contact details of provider: https://edirc.repec.org/data/depirgr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.