 Aloha, I'm Kelea Ikeena, president of the Grassroot Institute. Economic theory declares that protectionist laws drive up costs and prices, such as the case with the Jones Act, that 1920 federal maritime law, well known to many of us in Hawaii for requiring that all goods carried between U.S. ports be transported on ships that are American-built, owned, crewed, and flagged. The Grassroot Institute of Hawaii has long held that the Jones Act is one reason for Hawaii's high cost of living. We have long recommended that the law be updated for the 21st century to help lower prices for Hawaii residents and others across the nation who rely on ocean carriers for most of their goods. Amazingly, there are people who try to dispute the negative economic effects of the Jones Act, which is why it's good to see a new research study coming out of the University of Hawaii. It indicates that indeed, the Jones Act does harm consumers. Now, what makes the new research even more exciting is the fact that it is from Yuhiro, also known as the Economic Research Organization of the University of Hawaii, highly respected. In a working paper released this month, Yuhiro research fellow William Olney examined the economic implications of the Jones Act, and he found that, contrary to one of its goals, both the number and capacity of Jones Act ships has steadily declined in recent decades. Now, that in turn has reduced domestic water shipments between the states. Specifically, Olney said, quote, a 10% decline in the capacity of the Jones Act ships reduces the value of domestic waterborne inflows by 4.7%, relative to inflows via other modes of transport, end of quote. On the mainland, this has meant shippers turning to less expensive trucks, railroads, and airlines to deliver their goods. Now, Hawaii, unfortunately, has virtually no alternatives to ocean carriers for bringing in all of the supplies it needs. We can't truck them in from California. According to Olney, our national share of waterborne shipments is 19% exceeded by only Alaska's at 31%. But to what extent is the Jones Act responsible for higher prices? Olney estimated that the decline in Jones Act ships was responsible for 2.6% of the observed increase in consumer prices in coastal states. That includes Hawaii from 1997 to 2016, when the consumer price index in those states increased overall by 52.6%. Now, 2.6% might not sound like much. And studies might show that to be a low ball figure. But it could have been equal to billions of dollars for Hawaii consumers over that time period. Worse, the Jones Act is regressive, like the state's general excise tax. So it hurts Hawaii's low income residents the most. Other Jones Act drawbacks cited by Olney include encouraging what is known as the substitution effect, whereby US buyers acquire goods that can be delivered less expensively from abroad rather than domestically. This is ironic because Jones Act defenders claim that the law protects American jobs, but actually, it has the perverse effect of encouraging more foreign imports rather than supporting US industry. In addition, Olney finds that by incentivizing domestic shippers to use trucks, railroads, and airlines, the Jones Act helps increase highway congestion and encourage transportation options that are more damaging to the environment. Now, Olney's study may seem like a complex way of getting to an intuitive truth, but that's what makes it so important. As the Grassroot Institute of Hawaii works to educate policymakers on the importance of modernizing the Jones Act, studies like this give us the data we need to change the debate. Thanks to research like the working paper from a hero, we're one step closer to demonstrating why it's good for American consumers and American businesses to update the Jones Act for the 21st century. I'm Kay Lee Akeena with the Grassroot Institute of Hawaii, Aloha.