Will more than 1 million refugees and migrants arrive in Europe by sea in 2016? (update)

Europe has already received more than 160,000 refugees this year, about 90.8% of which made landfall in Greece[a]. But, we’re told, the migrant flow in Greece has recently fallen from about 1,000/day to about 100/day:

Where thousands arrived in a day, now hundreds — and some days far fewer — splash onto the Greek shores from Turkey, a possible sign that the largest mass migration of the 21st century is slowing or that refugees are changing course as Europe scrambles to erect new barriers.[b]

Let’s assume that the fall in the number of arrivals is really a result of political changes and not just changes in the weather or in other conditions that would cause a sharp but temporary lessening of the flow of refugees and migrants. How should we extrapolate this change over the rest of 2016?

One answer is that we should expect current conditions to continue more-or-less as they are. So by December 31, the total number of refugees and migrants who have arrived in Europe will be 160,000 (i.e., the number who are already there) + 27,700 (100 refugees per day for the next 277 days arriving in Greece) + 48,000 (the remaining 9.2% of refugees who arrive by sea elsewhere than in Greece and who – I think – won’t be deterred by the EU’s deal with Turkey). So the answer is that we should expect about 235,700 by the end of 2016.

But what are the assumptions behind this model, and how reasonable are they? Well, the number of refugees in 2015 varied greatly by month, and October saw more than 40 times as many refugees and migrants as January. So perhaps it’s more reasonable to project a 90% reduction in refugees and migrants over the year, rather than a constant flow of 100/day. Using last year as a baseline, that would mean 90,000 more refugees and migrants in Greece, not 27,700. But that’s still a lot less than 1,000,000.

In fact, if we leave aside (for the moment) the question of refugees and migrants arriving elsewhere than in Greece, the EU would only have to impose a 25-or-so% reduction on 2015 on the flow of refugees and migrants in order to keep the total number under 1 million. That seems achievable, though that fact has to be counterbalanced with the fact that the flow of refugees and migrants is 7 times higher during the first 3 months of 2016 than it was during the same months in 2015.

Perhaps this way of thinking of it helps: The demand curve for refugee/migrant status in the EU has been moving sharply out and to the right when compared to 2014 and even 2015 (though its has been slowing steadily since November). Up to this point, the supply curve for refugee/migrant status in the EU has been pretty flat. The result is just what you’d expect: the quantity of refugees/migrants in the EU has gone up dramatically when compared to previous years. But the EU is now trying to cut the quantity supplied by indirectly raising the price of admission. (Obviously, the EU can’t directly raise the price, though it is a monopolist of sorts, because the price is paid, not to the EU, but to people who facilitate their travel[c].)

So while the demand curve is moving out and to the right, the supply curve is shifting on its axis to be less horizontal and more vertical, i.e., it is experiencing greater price inelasticity of supply [d]. Under these conditions, one can’t say what will happen to the equilibrium quantity of refugees/migrants in the EU, unless one knows more about the relative shapes, positions, and movements of both the supply and demand curves. And I doubt anyone has anything more than a crude guess about any of that. Well, I sure don’t.

But when the demand curve moves out and to the right while the supply curve become for inelastic, you can be damn sure that the price will go up. How much are people willing and able to pay to get the European shores (that is, what’s the price inelasticity of demand, as opposed to supply)? That’s really the big question, as I see it. If demand is highly inelastic, then, in the long run, refugees and migrants who are trying to get to the EU will just consume other, more expensive, ways of getting there (other than, e.g., the fairly cheap trip from western Turkey to one of the nearby Greek islands, like Lesvos).

Are refugees and migrants willing and able to pay enough to land in Italy including Sicily (please forgive me, my Sicilian friends) as they already have this year to the tune of almost 5,000/month? The trip from Libya to Italy runs $500-$2,000[e]. That’s half as much as people were paying for the land voyage to the EU last year[f], and I’m not even sure that’s a real option anymore. If we see a sharp rise in the amount of money that refugees and migrants are willing and able to pay during the next, say, five weeks, then I’d expect the chances of getting to 1,000,000 by the end of 2016 are still pretty high. If not, then not. How to find out whether such a sharp rise occurs? I’m working on that….

But for now, I’m going straight down the middle and setting the odds at 50/50.

 

[a] http://data.unhcr.org/mediterranean/regional.php

[b] https://www.washingtonpost.com/world/europe/eu-deal-to-stop-migrants-puts-fear-in-those-waiting-in-turkey/2016/03/26/77c2cc3e-f114-11e5-a2a3-d4e9697917d1_story.html

[c] http://www.ibtimes.com/syrian-refugees-heading-europe-are-big-business-lebanons-travel-agents-2126557

[d] http://www.economicsonline.co.uk/Competitive_markets/Price_elasticity_of_supply.html

[e] http://www.altaiconsulting.com/mixedmigrationlibya/Altai_Consulting-UNHCR-Mixed_Migration_Libya.pdf

[f] http://www.spiegel.de/international/europe/refugee-smuggling-a-big-business-in-the-balkans-a-1051461.html

[g] http://www.nytimes.com/2015/08/17/world/europe/turkey-greece-mediterranean-kos-bodrum-migrants-refugees.html?_r=0

 

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