Capacity Output and Possibility of Cost Reduction: Fishery management in Japan
Japan's fishery harvest peaked in the late 1980s. Providing individually specific catch shares of the Total Allowable Catch (TAC) to each fisherman is the key to avoid the race for fish. Thus, in moving the idea into practice with the actual implementation of catch shares, it is curial to estimate the potential cost reduction in the industry. We find that the maximum level of production the fixed inputs in Japan are capable of supporting (i.e., capacity output) could be three times higher. Additionally, current overall fixed inputs could be reduced to one-tenth. Getting rid of these inefficient fishers would help lead to sustainable fishery management. These significant potential results are important for policy purpose. For example, about 450 billion yen (about 4.5 billion dollars) can be saved allocating individually specific catch shares to each fisherman.
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- Kristiaan Kerstens & Niels Vestergaard & Dale Squires, 2006. "A short-run Johansen industry model for common-pool resources: planning a fishery's industrial capacity to curb overfishing," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 33(3), pages 361-389, September.
- H. Scott Gordon, 1954. "The Economic Theory of a Common-Property Resource: The Fishery," Journal of Political Economy, University of Chicago Press, vol. 62, pages 124.
- Dupont, Diane P. & Grafton, R. Quentin & Kirkley, James & Squires, Dale, 2002. "Capacity utilization measures and excess capacity in multi-product privatized fisheries," Resource and Energy Economics, Elsevier, vol. 24(3), pages 193-210, June.
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