Trading Frictions and Fishery Discards
AbstractWe study harvest uncertainty in a fishery that is managed with tradable quotas. We show that eliminating trading frictions in quota markets can eliminate at-sea discards that occur due to random catch-quota imbalance. In general,discards and the cost of harvesting a fixed quota increases with trading costs. As an alternative, when trading costs are unavoidable, we deduce an ad-valorem tax/subsidy that can eliminate discards while delivering a desired harvest target. These results have important implications for quota program designs, which often limit quota trades to address ancillary management objectives.
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Bibliographic InfoPaper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 35039.
Date of creation: 03 Apr 2012
Date of revision:
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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
Web page: http://www.econ.iastate.edu
More information through EDIRC
Trading frictions; discards; harvest uncertainty; individual transferable fishing quotas;
Find related papers by JEL classification:
- Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
- Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
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