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Bycatch risk pools for the US West Coast Groundfish Fishery

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  • Holland, Daniel S.
  • Jannot, Jason E.

Abstract

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.

Suggested Citation

  • Holland, Daniel S. & Jannot, Jason E., 2012. "Bycatch risk pools for the US West Coast Groundfish Fishery," Ecological Economics, Elsevier, vol. 78(C), pages 132-147.
    • Handle: RePEc:eee:ecolec:v:78:y:2012:i:c:p:132-147
    DOI: 10.1016/j.ecolecon.2012.04.010
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    Cited by:

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    2. Donovan, Pierce & Springborn, Michael, 2022. "Balancing conservation and commerce: A shadow value viability approach for governing bycatch," Journal of Environmental Economics and Management, Elsevier, vol. 114(C).
    3. Keith Evans & Quinn Weninger, 2014. "Information Sharing and Cooperative Search in Fisheries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 58(3), pages 353-372, July.
    4. Holzer, Jorge & DePiper, Geret, 2019. "Intertemporal quota arbitrage in multispecies fisheries," Journal of Environmental Economics and Management, Elsevier, vol. 93(C), pages 185-207.
    5. Rong Zhou & Kathleen Segerson, 2016. "Individual vs. Collective Approaches to Fisheries Management," Marine Resource Economics, University of Chicago Press, vol. 31(2), pages 165-192.
    6. Matthew Kotchen & Kathleen Segerson, 2020. "The Use of Group-Level Approaches to Environmental and Natural Resource Policy," NBER Working Papers 27142, National Bureau of Economic Research, Inc.
    7. Lee Cronk & Athena Aktipis, 2021. "Design principles for risk-pooling systems," Nature Human Behaviour, Nature, vol. 5(7), pages 825-833, July.
    8. Ahsanuzzaman, & Palm-Forster, Leah H. & Suter, Jordan F., 2022. "Experimental evidence of common pool resource use in the presence of uncertainty," Journal of Economic Behavior & Organization, Elsevier, vol. 194(C), pages 139-160.

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    More about this item

    Keywords

    Fisheries; Risk; Uncertainty; Incidental catch; Bycatch; Individual quota; Risk pools;
    All these keywords.

    JEL classification:

    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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