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Asset Pricing in Created Markets

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  • Richard G. Newell
  • Kerry L. Papps
  • James N. Sanchirico

Abstract

We investigate the applicability of the present-value asset pricing model to fishing quota markets by applying instrumental variable panel data estimation techniques to 15 years of market transactions from New Zealand's individual transferable quota (ITQ) market. In addition to the influence of current fishing rents, we explore the effect of market interest rates, risk, and expected changes in future rents on quota asset prices. The results indicate that quota asset prices are positively related to declines in interest rates, lower levels of risk, expected increases in future fish prices, and expected cost reductions from rationalization under the quota system. Copyright 2007, Oxford University Press.

Suggested Citation

  • Richard G. Newell & Kerry L. Papps & James N. Sanchirico, 2007. "Asset Pricing in Created Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(2), pages 259-272.
    • Handle: RePEc:oup:ajagec:v:89:y:2007:i:2:p:259-272
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    File URL: http://hdl.handle.net/10.1111/j.1467-8276.2007.01018.x
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    Cited by:

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    3. Pascal Le Floc'h & Iuliana Matei & Mehmet Tuncel, 2012. "Commercial Sizes and Prices on the French Monkfish Fishery :A Time-Series Analysis," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 55(1), pages 97-115.
    4. Rimsaite, Renata & Fisher-Vanden, Karen A. & Olmstead, Sheila M., 2016. "Price Efficiency in U.S. Water Rights Markets," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 243124, Agricultural and Applied Economics Association.
    5. Grainger, Corbett A. & Costello, Christopher J., 2014. "Capitalizing property rights insecurity in natural resource assets," Journal of Environmental Economics and Management, Elsevier, vol. 67(2), pages 224-240.
    6. Kailin Kroetz & James N. Sanchirico & Daniel K. Lew, 2015. "Efficiency Costs of Social Objectives in Tradable Permit Programs," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 2(3), pages 339-366.
    7. Aaron Hatcher, 2022. "A Model of Quota Prices in a Multispecies Fishery with “Choke” Species and Discarding," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(4), pages 825-846, August.
    8. repec:ags:aaea16:236373 is not listed on IDEAS
    9. Stefano Mainardi, 2021. "Parametric and Semiparametric Efficiency Frontiers in Fishery Analysis: Overview and Case Study on the Falkland Islands," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 79(2), pages 169-210, June.
    10. Rozowski, Casey & Vukina, Tomislav, 2024. "Production Quotas, Competition and Farm Values: A Chronicle of the Swine Industry in North Carolina," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 0(Preprint), January.
    11. Reimer, Matthew N. & Abbott, Joshua K. & Haynie, Alan C., 2022. "Structural behavioral models for rights-based fisheries," Resource and Energy Economics, Elsevier, vol. 68(C).
    12. Holland, Daniel S. & Thunberg, Eric & Agar, Juan & Crosson, Scott & Demarest, Chad & Kasperski, Stephen & Perruso, Larry & Steiner, Erin & Stephen, Jessica & Strelcheck, Andy & Travis, Mike, 2015. "US catch share markets: a review of data availability and impediments to transparent markets," Marine Policy, Elsevier, vol. 57(C), pages 103-110.

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