Bycatch risk pools for the US West Coast Groundfish Fishery
Individual transferable quotas (ITQs) in multispecies fisheries create incentives for fishermen to avoid bycatch of species for which quota is scarce. However, when bycatch is highly uncertain, individual quota demand and prices may be volatile creating substantial financial risk for fishermen. The US Pacific Groundfish fishery recently introduced an ITQ system with low quotas for several overfished species with highly uncertain bycatch rates. Some fishery participants formed risk pools where bycatch quota is pooled and available to all pool members. Risk pools can reduce financial risk and transactions costs for individuals, but they also create moral hazard and adverse selection problems. We present an empirical analysis of bycatch risk that informs several issues of risk pool design including which bycatch species to include, pools size, and how to evaluate and mitigate adverse selection and moral hazard problems.
References listed on IDEAS
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.:
- Kimball, Miles S, 1990.
"Precautionary Saving in the Small and in the Large,"
Econometric Society, vol. 58(1), pages 53-73, January.
- Miles S. Kimball, 1989. "Precautionary Saving in the Small and in the Large," NBER Working Papers 2848, National Bureau of Economic Research, Inc.
- van Kleef, R.C. & van de Ven, W.P.M.M. & van Vliet, R.C.J.A., 2009. "Shifted deductibles for high risks: More effective in reducing moral hazard than traditional deductibles," Journal of Health Economics, Elsevier, vol. 28(1), pages 198-209, January.
- Hogarth, Robin M & Kunreuther, Howard, 1985. "Ambiguity and Insurance Decisions," American Economic Review, American Economic Association, vol. 75(2), pages 386-390, May.
- Landsman, Zinoviy & Valdez, Emiliano A., 2005. "Tail Conditional Expectations for Exponential Dispersion Models," ASTIN Bulletin: The Journal of the International Actuarial Association, Cambridge University Press, vol. 35(01), pages 189-209, May.
- Abbott, Joshua K. & Wilen, James E., 2009. "Regulation of fisheries bycatch with common-pool output quotas," Journal of Environmental Economics and Management, Elsevier, vol. 57(2), pages 195-204, March.
- Boyce, John R., 1996. "An Economic Analysis of the Fisheries Bycatch Problem," Journal of Environmental Economics and Management, Elsevier, vol. 31(3), pages 314-336, November.
- Philippe Artzner & Freddy Delbaen & Jean-Marc Eber & David Heath, 1999. "Coherent Measures of Risk," Mathematical Finance, Wiley Blackwell, vol. 9(3), pages 203-228.
- Herrera, Guillermo E., 2005. "Stochastic bycatch, informational asymmetry, and discarding," Journal of Environmental Economics and Management, Elsevier, vol. 49(3), pages 463-483, May.
- Niko Matouschek & Paolo Ramezzana, 2007. "THE ROLE OF EXCLUSIVE CONTRACTS IN FACILITATING MARKET TRANSACTIONS -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 55(2), pages 347-371, 06.
- Hogarth, Robin M & Kunreuther, Howard, 1989. "Risk, Ambiguity, and Insurance," Journal of Risk and Uncertainty, Springer, vol. 2(1), pages 5-35, April.
- Holland, D.S., 2010. "Markets, pooling and insurance for managing bycatch in fisheries," Ecological Economics, Elsevier, vol. 70(1), pages 121-133, November.
- Singh, Rajesh & Weninger, Quinn, 2009. "Bioeconomies of scope and the discard problem in multiple-species fisheries," Journal of Environmental Economics and Management, Elsevier, vol. 58(1), pages 72-92, July. Full references (including those not matched with items on IDEAS)