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Fishing Quota Markets

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Author Info
Kerr, Suzi
Sanchirico, James () (Resources for the Future)
Newell, Richard () (Resources for the Future)

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Abstract

Fisheries worldwide continue to suffer from the negative consequences of open access. In 1986, New Zealand responded by establishing an individual transferable quota (ITQ) system that by 1998 included 33 species and more than 150 markets for fishing quotas. We assess these markets in terms of trends in market activity, price dispersion, and the fundamentals determining quota prices. We find that market activity is sufficiently high to support a competitive market and that price dispersion has decreased over time. Using a 15-year panel dataset, we also find evidence of economically rational behavior through the relationship between quota lease and sale prices and fishing output and input prices, ecological variability, and market interest rates. Controlling for these factors, our results show an increase in quota prices, consistent with increased profitability. Overall, the results suggest these markets are operating reasonably well, implying that ITQs can be effective instruments for efficient fisheries management.

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Paper provided by Resources For the Future in its series Discussion Papers with number dp-02-20.

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Date of creation: 01 Aug 2002
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Handle: RePEc:rff:dpaper:dp-02-20

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Related research
Keywords: tradable permits; individual transferable quota; fisheries; policy.;

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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
D40 - Microeconomics - - Market Structure and Pricing - - - General
L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Cancino, Jose P. & Uchida, Hirotsugu & Wilen, James E., 2007. "TURFs and ITQs: Collective vs. Individual Decision Making," Marine Resource Economics, Marine Resources Foundation, vol. 22(4). [Downloadable!]
  2. Richard Carson & Clive Granger & Jeremy Jackson & Wolfram Schlenker, 2009. "Fisheries Management Under Cyclical Population Dynamics," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 42(3), pages 379-410, March. [Downloadable!] (restricted)
    Other versions:
  3. Murphy, James & Stranlund, John, 2003. "An Experimental Analysis Of Compliance Behavior In Emissions Trading Programs: Some Preliminary Results," 2003 Annual meeting, July 27-30, Montreal, Canada 22039, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  4. Sanchirico, James & Holland, Daniel & Quigley, Kathryn & Fina, Mark, 2005. "Analysis of Flexibility Mechanisms for Quota-Catch Balancing in Multispecies Individual Fishing Quotas," Discussion Papers dp-05-54, Resources For the Future. [Downloadable!]
  5. Matthiasson, Thorolfur, 2008. "Rent Collection, Rent Distribution, and Cost Recovery: An Analysis of Iceland’s ITQ Catch Fee Experiment," Marine Resource Economics, Marine Resources Foundation, vol. 23(1). [Downloadable!]
  6. Sanchirico, James & Newell, Richard & Papps, Kerry, 2005. "Asset Pricing in Created Markets for Fishing Quotas," Discussion Papers dp-05-46, Resources For the Future. [Downloadable!]
  7. Kelly Lock & Stefan Leslie, 2007. "New Zealand's Quota Management System: A History of the First 20 Years," Working Papers 07_02, Motu Economic and Public Policy Research. [Downloadable!]
  8. Lawrence J. White, 2006. "The Fishery as a Watery Commons: Lessons from the Experiences of Other Public Policy Areas for US Fisheries Policy," Working Papers 06-18, New York University, Leonard N. Stern School of Business, Department of Economics. [Downloadable!]
  9. Weninger, Quinn, 2008. "Individual fishing quotas in the eastern Gulf of Mexico grouper fishery: fleet restructuring, effort reduction and cost savings," Staff General Research Papers 12890, Iowa State University, Department of Economics. [Downloadable!]
  10. Dafna Eshel, 2005. "Optimal Allocation of Tradable Pollution Rights and Market Structures," Journal of Regulatory Economics, Springer, vol. 28(2), pages 205-223, 09. [Downloadable!] (restricted)
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