Efficiency Gains and Cost Reductions from Individual Transferable Quotas: A Stochastic Cost Frontier for
AbstractIn this paper efficiency gains and associated cost reductions from increases in traded quota are estimated with a stochastic cost frontier for the Australian South East Trawl Fishery (SETF). Estimation of this frontier also provides key information on the relative importance of input costs in the SETF, returns to scale, variations in costs as a result of trade in quota and the economic performance of each fishing vessel, year to year. Final estimations indicate that increases in the volume of quota traded have resulted in considerable efficiency gains and cost reductions in the SETF, ranging from 1.8 to 3.5 cents per kilogram for surveyed vessels for every one per cent increase in the volume of quota traded, or 1 to 2.4 per cent of total variable costs, with considerable gains also accruing to crew and skipper in the form of larger share payments. Mean vessel efficiency is relatively high in the SETF, estimated at over 90 per cent, and increases further to 92 per cent over the sample period with increased trades in quota.
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Bibliographic InfoPaper provided by International and Development Economics in its series International and Development Economics Working Papers with number idec03-6.
Length: 27 pages
Date of creation: 2003
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Find related papers by JEL classification:
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-12-12 (All new papers)
- NEP-ENV-2004-12-12 (Environmental Economics)
- NEP-SEA-2004-12-12 (South East Asia)
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