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Efficiency Costs of Social Objectives in Tradable Permit Programs

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Listed:
  • Kailin Kroetz
  • James N. Sanchirico
  • Daniel K. Lew

Abstract

Objectives of tradable permit programs are often broader than internalizing an externality and improving economic efficiency. Many programs are designed to accommodate community, cultural, and other nonefficiency goals through restrictions on trading. However, restrictions can decrease economic efficiency gains. We use a policy experiment from the Alaska halibut and sablefish tradable permit program, which includes both restricted and unrestricted permits, to develop one of the few empirical measurements of the costs of meeting nonefficiency goals. We estimate that restrictions are reducing resource rent in the halibut and sablefish fisheries by 25% and 9%, respectively.

Suggested Citation

  • Kailin Kroetz & James N. Sanchirico & Daniel K. Lew, 2015. "Efficiency Costs of Social Objectives in Tradable Permit Programs," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 2(3), pages 339-366.
  • Handle: RePEc:ucp:jaerec:doi:10.1086/681646
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    Cited by:

    1. repec:eee:jocoma:v:12:y:2018:i:c:p:9-18 is not listed on IDEAS
    2. Standal, Dag & Sønvisen, Signe Annie & Asche, Frank, 2016. "Fishing in deep waters: The development of a deep-sea fishing coastal fleet in Norway," Marine Policy, Elsevier, vol. 63(C), pages 1-7.
    3. repec:eee:jeeman:v:88:y:2018:i:c:p:427-446 is not listed on IDEAS
    4. repec:kap:enreec:v:69:y:2018:i:4:d:10.1007_s10640-016-0106-3 is not listed on IDEAS

    More about this item

    JEL classification:

    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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