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Potential Rent and Overcapacity in the Swedish Baltic Sea Trawl Fishery

Author

Listed:
  • Eggert, Håkan

    () (Department of Economics, School of Economics and Commercial Law, Göteborg University)

  • Tveterås, Ragnar

    (Stavanger University)

Abstract

Many EU fisheries have problems with depleted stocks and fleet overcapacity following from regulated open access regimes. Some EU countries have introduced Individual Vessel Quotas (IVQs), which can stop the race to catch and provide the fishers with incentives to minimize costs for a given catch. We model an IVQ fishery using a cost function approach and apply the methodology to the Swedish cod fishery in the Baltic Sea. We estimate a translog cost function for a data set of Swedish trawlers and assess the potential gains from a structural adjustment of the fleet. Results suggest potential cost savings of SEK 140 millions and a desirable fleet reduction of 25% for the Swedish Baltic Sea cod fishery.

Suggested Citation

  • Eggert, Håkan & Tveterås, Ragnar, 2004. "Potential Rent and Overcapacity in the Swedish Baltic Sea Trawl Fishery," Working Papers in Economics 152, University of Gothenburg, Department of Economics.
  • Handle: RePEc:hhs:gunwpe:0152
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    File URL: http://hdl.handle.net/2077/19625
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    References listed on IDEAS

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    1. Robidoux, B. & Lester, J., 1988. "Econometric Estimates Of Scale Economies In Canadian Manufacturing," Working Papers-Department of Finance Canada 1988-4, Department of Finance Canada.
    2. Håkan Eggert & Peter Martinsson, 2004. "Are Commercial Fishers Risk-Lovers?," Land Economics, University of Wisconsin Press, vol. 80(4).
    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. Quinn Weninger, 2000. "Buyback programs in commercial fisheries:efficiency versus transfers," Canadian Journal of Economics, Canadian Economics Association, vol. 33(2), pages 394-412, May.
    5. Barten, A. P., 1969. "Maximum likelihood estimation of a complete system of demand equations," European Economic Review, Elsevier, vol. 1(1), pages 7-73.
    6. Håkan Eggert & Ragnar Tveteras, 2004. "Stochastic Production and Heterogeneous Risk Preferences: Commercial Fishers' Gear Choices," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 199-212.
    7. Homans, Frances R. & Wilen, James E., 1997. "A Model of Regulated Open Access Resource Use," Journal of Environmental Economics and Management, Elsevier, vol. 32(1), pages 1-21, January.
    8. 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.
    9. Weninger, Quinn & Waters, James R., 2003. "Economic benefits of management reform in the northern Gulf of Mexico reef fish fishery," Journal of Environmental Economics and Management, Elsevier, vol. 46(2), pages 207-230, September.
    10. Christensen, Laurits R & Greene, William H, 1976. "Economies of Scale in U.S. Electric Power Generation," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 655-676, August.
    11. Wilen, James E., 2000. "Renewable Resource Economists and Policy: What Differences Have We Made?," Journal of Environmental Economics and Management, Elsevier, vol. 39(3), pages 306-327, May.
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    Citations

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    Cited by:

    1. Sigbjorn Tveteras & Carlos Paredes & Julio Peña, 2011. "Individual Fishing Quotas in Peru: Stopping the Race for Anchovies," ILADES-Georgetown University Working Papers inv263, Ilades-Georgetown University, Universidad Alberto Hurtado/School of Economics and Bussines.
    2. Håkan Eggert & Ragnar Tveterås, 2013. "Productivity development in Icelandic, Norwegian and Swedish fisheries," Applied Economics, Taylor & Francis Journals, vol. 45(6), pages 709-720, February.
    3. Christine Roeckmann & Uwe A. Schneider & Michael A. St.John & Richard S.J. Tol, 2006. "Rebuilding the Eastern Baltic cod stock under environmental change - Part II: The economic viability of a marine protected area," Working Papers FNU-106, Research unit Sustainability and Global Change, Hamburg University, revised May 2006.
    4. Gianluigi Coppola & Monica Gambino & Alfonso Pellecchia & Dario Pinello & Evelina Carmen Sabatella, 2015. "Modelling The Technology Of Commercial Fishing Vessel In Italy: A Cost Function Approach," 2015 EAFE (European Association of Fisheries Economists) Conference Papers 017, Nisea.
    5. Elofsson, Katarina & Bengtsson, Goran & Gren, Ing-Marie, 2011. "Optimal Management of Invasive Species with Different Reproduction and Survival Strategies," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114343, European Association of Agricultural Economists.
    6. Trond Bjørndal & Daniel Gordon & Mintewab Bezabih, 2012. "Measuring potential profits in a bioeconomic model of the mixed demersal fishery in the North Sea," Journal of Bioeconomics, Springer, vol. 14(2), pages 147-166, July.
    7. Sean Pascoe & Simon Vieira & Catherine M. Dichmont & André E. Punt, 2011. "Optimal vessel size and output in the Australian northern prawn fishery: a restricted profit function approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(1), pages 107-125, January.

    More about this item

    Keywords

    cost function; efficiency gains; individual vessel quotas; Swedish fisheries;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery

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