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Managing partially protected resources under uncertainty

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Author Info

  • Fischer, Carolyn
  • Laxminarayan, Ramanan

Abstract

It is common wisdom that open-access leads to the inefficient use of resources and private ownership of resources improves efficiency. However, the impact of enclosure and efficient management of some resource pools on other open-access resource pools is poorly recognized. The problem is common to many congestion-prone facilities including roads, parks, fisheries, antibiotics, grazing lands and wilderness areas. In this paper, we analyze the optimality of price and quantity instruments in regulating resource use when there is uncertainty about congestion costs. Price instruments are found to be preferable to quantity instruments, and strictly so when demand is less than perfectly elastic. We also explore the effect of market power by resource owners on the relative efficiency of the two instruments.

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File URL: http://www.sciencedirect.com/science/article/B6WJ6-4XFFJK4-1/2/771d8fbdbd6db84148b2ff5ed28312dd
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Bibliographic Info

Article provided by Elsevier in its journal Journal of Environmental Economics and Management.

Volume (Year): 59 (2010)
Issue (Month): 2 (March)
Pages: 129-141

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Handle: RePEc:eee:jeeman:v:59:y:2010:i:2:p:129-141

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Web page: http://www.elsevier.com/locate/inca/622870

Related research

Keywords: Regulation Congestion Taxes Quotas;

References

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Citations

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Cited by:
  1. Christopher Costello & Nicolas Quérou & Agnes Tomini, 2013. "Partial enclosure of the commons," Working Papers 13-07, LAMETA, Universtiy of Montpellier, revised Apr 2013.
  2. Jonathan E. Hughes & Daniel Kaffine, 2013. "When is Encouraging Consumption of Common Property Second Best? Sorting, Congestion and Entry in the Commons," Working Papers 2013-05, Colorado School of Mines, Division of Economics and Business.
  3. Lars Gårn Hansen & Frank Jensen & Clifford Russell, 2011. "Instrument Choice when Regulators are Concerned about Resource Extinction," IFRO Working Paper 2011/6, University of Copenhagen, Department of Food and Resource Economics, revised Jul 2011.

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