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Efficiency of Individual Transferable Quotas (ITQ) Systems and Input and Stock Controls

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  • HIGASHIDA Keisaku
  • TAKARADA Yasuhiro

Abstract

This paper examines whether or not the number of fishers is optimal under an Individual Transferable Quotas (ITQ) program. We consider two cases on the structure of the quota market: (1) cases in which all fishers are price takers, and (2) cases in which large-scale fishers have market power. When all fishers are price takers in the quota market, the social optimum is likely to be achieved given the total allowable catch (TAC) level. On the other hand, when low-cost fishers have market power in the quota market, the inefficiency may be serious: excess entry of low-cost fishers and insufficient exit of high-cost fishers may take place. Moreover, we demonstrate that vessel controls and stock targeting may work for an ITQ program.

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  • HIGASHIDA Keisaku & TAKARADA Yasuhiro, 2009. "Efficiency of Individual Transferable Quotas (ITQ) Systems and Input and Stock Controls," Discussion papers 09046, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:09046
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    References listed on IDEAS

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    1. Anderson, Lee G., 1991. "A note on market power in ITQ fisheries," Journal of Environmental Economics and Management, Elsevier, vol. 21(3), pages 291-296, November.
    2. Dale Squires & James Kirkley, 1996. "Individual Transferable Quotes in a Multiproduct Common Property Industry," Canadian Journal of Economics, Canadian Economics Association, vol. 29(2), pages 318-342, May.
    3. Quinn Weninger, 1998. "Assessing Efficiency Gains from Individual Transferable Quotas: An Application to the Mid-Atlantic Surf Clam and Ocean Quahog Fishery," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(4), pages 750-764.
    4. Niels Vestergaard & Frank Jensen & Henning P. Jørgensen, 2005. "Sunk Cost and Entry-Exit Decisions under Individual Transferable Quotas: Why Industry Restructuring Is Delayed," Land Economics, University of Wisconsin Press, vol. 81(3).
    5. Scott C. Matulich & Murat Sever, 1999. "Reconsidering the Initial Allocation of ITQs: The Search for a Pareto-Safe Allocation between Fishing and Processing Sectors," Land Economics, University of Wisconsin Press, vol. 75(2), pages 203-219.
    6. Boyce, John R., 2004. "Instrument choice in a fishery," Journal of Environmental Economics and Management, Elsevier, vol. 47(1), pages 183-206, January.
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    Cited by:

    1. Zafer Kanik & Serkan Kucuksenel, 2013. "The Promise of Transferable Fishing Concessions on EU Fisheries," ERC Working Papers 1312, ERC - Economic Research Center, Middle East Technical University, revised Dec 2013.
    2. Kanik, Zafer & Kucuksenel, Serkan, 2014. "Transferable Fishing Concessions and EU Fisheries," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 183092, European Association of Agricultural Economists.

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