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ITQ markets with administrative costs: An application to the industrial common sardine and anchovy fishery in Chile

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  • Salgado, Hugo
  • Chávez, Carlos A.
  • Miller, Montserrat
  • Stranlund, John K.

Abstract

Using numerical simulations of the mixed common sardine and anchovy fishery of central-southern Chile, this article studies the effects of the distribution of administrative costs between the government and the fishing industry in an individual transferable quota system. Consistent with recent theoretical results, the analysis indicates that the presence and distribution of the administrative costs can have important impacts on the performance of an individual transferable quota system. The numerical simulations reveal significant and non-monotonic effects on the optimal paths of transferable quotas, biomass, quota price, size of the active fishing fleet, and the value of the fishery. While the effects of the distribution of administrative costs are complicated in the case study under analysis, the results suggest that it is likely optimal for the industry and government to share the administrative costs in this fishery.

Suggested Citation

  • Salgado, Hugo & Chávez, Carlos A. & Miller, Montserrat & Stranlund, John K., 2015. "ITQ markets with administrative costs: An application to the industrial common sardine and anchovy fishery in Chile," Marine Policy, Elsevier, vol. 62(C), pages 178-185.
    • Handle: RePEc:eee:marpol:v:62:y:2015:i:c:p:178-185
    DOI: 10.1016/j.marpol.2015.09.010
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    References listed on IDEAS

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    1. Sigbjorn Tveteras & Carlos Paredes & Julio Peña, 2011. "Individual Fishing Quotas in Peru: Stopping the Race for Anchovies," ILADES-UAH Working Papers inv263, Universidad Alberto Hurtado/School of Economics and Business.
    2. Tom Tietenberg, 2003. "The Tradable-Permits Approach to Protecting the Commons: Lessons for Climate Change," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 19(3), pages 400-419.
    3. Chávez, Carlos & González, Nuria & Salgado, Hugo, 2008. "ITQs under illegal fishing: An application to the red shrimp fishery in Chile," Marine Policy, Elsevier, vol. 32(4), pages 570-579, July.
    4. Arnason, Ragnar & Hannesson, Rögnvaldur & Schrank, William E., 2000. "Costs of fisheries management: the cases of Iceland, Norway and Newfoundland," Marine Policy, Elsevier, vol. 24(3), pages 233-243, May.
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