Optimal quota programs
AbstractThis paper considers the choice among three different types of individual quota programs in a multi-product fishery when technology, prices, and compliance are all uncertain: (1) Aggregated quota, which regulates the total weight of all species; (2) Disaggregated quota, which regulates the weight of each species separately, and (3) Value-based quota, which regulates the total value of all species. The paper first considers the welfare maximization problem in the context of simple stylized models of the fishery. These examples show that different types of quota programs are preferred in different fisheries. To learn which type of quota program should be preferred in an actual fishery, the paper then solves the welfare maximization problem numerically, where uncertainty about prices and technology are described by densities estimated from data on the Scotia-Fundy Cod-Haddock-Pollock fishery. In this application, a disaggregated quota program almost always dominates the other choices, and is at worst slightly inferior to a value-based quota program.
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Bibliographic InfoPaper provided by University of Toronto, Department of Economics in its series Working Papers with number mturner-98-01.
Length: 52 pages
Date of creation: 11 Jan 1998
Date of revision:
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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
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
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