Privatizing renewable resources: Who gains, who loses?
AbstractRenewable resources can provide society with (i) resource rent, (ii) consumer surplus and (iii) worker surplus in resource harvesting. In a dynamic analysis we show that privatization increases the present values of consumer surplus and worker surplus if harvesting costs do not depend on the resource stock. If they do, consumers and workers tend to lose from privatization and indeed prefer open-access if the discount rate is sufficiently high. Applying the analysis to the North-east Arctic Cod fishery, we find that socially efficient privatization would increase the present value of resource rent by 1.1 billion USD, while the present value of consumer surplus would decrease by 0.4 billion USD. These diverging interests may explain why rent dissipation often persists even if use rights could be defined and enforced. --
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Bibliographic InfoPaper provided by Christian-Albrechts-University of Kiel, Department of Economics in its series Economics Working Papers with number 2012-02.
Date of creation: 2012
Date of revision:
resource rent; consumer surplus; worker surplus; distribution; political economy;
Find related papers by JEL classification:
- D33 - Microeconomics - - Distribution - - - Factor Income Distribution
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply (the Commons)
- Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
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