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Some European governments subsidize their residents when they travel at sea. This paper seeks to analyze the impact on prices of maritime passengers’ subsidies in Europe. Following a review of the scarce academic literature on this topic and the subsidy scheme in Europe, a sample of firms’ prices and other characteristics of 40 European routes for 2016 are analyzed. Both an estimation of a price equation and a matching approach are applied and reach the same conclusion: prices per kilometer are around 40 per cent higher on those subsidized routes due to subsidies. This outcome reduces the potential subsidy gain to consumers. [ABSTRACT FROM AUTHOR]

The article comments on the commercial reasons for a limited subsidization of the U.S. merchant marine sector as of 1966. Federal aid to and protection of the merchant marine and the shipping industry is costing taxpayers one-half billion dollars a year despite the decline in the number of active ships since the end of World War II. The article also discusses the Merchant Marine Act of 1936 and the Seamen's Act of 1937. The categories in which the arguments in support of shipping subsidies are discussed.

In a Cournot duopoly market, this paper studies the role of product differentiation in the resolution of the export subsidy dispute. It is shown that the optimal export subsidy decreases with the degree of product differentiation and the export subsidy will be eliminated completely when the competitive goods are made perfectly different. Furthermore, increasing the degree of product differentiation will also increase the profits of the firms and the welfare of the exporting countries. [ABSTRACT FROM AUTHOR]