Quota Trading and Profitability: Theoretical Models and Applications to Danish Fisheries
AbstractUsing Data Envelopment Analysis (DEA), we provide a framework to analyze the potential gains from quota trading. We compare the industry profit and structure before and after a free trade reallocation of production quotas. The effects of tradable production quotas depend on several technological and behavioral characteristics, including the ability to learn best practice (catch-up) and the ability to change the input and output composition (mix). To illustrate the usefulness of our approach, we analyze a dataset from the Danish fishery. We study the industry profit and structure under each of four sets of technological and behavioral characteristics.
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Bibliographic InfoPaper provided by Royal Veterinary and Agricultural University, Food and Resource Economic Institute in its series Unit of Economics Working papers with number 24180.
Date of creation: 2003
Date of revision:
Data Envelopment Analysis (DEA); Individual Transferable Quotas (ITQ); reallocation; technical efficiency; allocative efficiency; fishery; Agribusiness; C61; L51; Q22; Q28;
Find related papers by JEL classification:
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
- Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
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