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The Value of Secure Property Rights: Evidence from Global Fisheries

Author

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  • Corbett A. Grainger
  • Christopher Costello

Abstract

Property rights are commonly touted as a solution to common pool resource problems. But in practice the security of these property rights varies substantially owing to differences in design. In fisheries, the design of individual transferable quotas (ITQs) varies widely; the consequences of these design differences on economic outcomes has not been studied. To test whether the security of these property rights affects asset values, we compile a unique dataset to examine the relationship between the exclusivity of property rights and the dividend price ratios for ITQs. We find evidence that stronger property rights lead to higher asset values and lower dividend price ratios in ITQ fisheries. This pecuniary effect of property rights security informs the current policy debate on the design of property rights institutions for managing natural resources.

Suggested Citation

  • Corbett A. Grainger & Christopher Costello, 2011. "The Value of Secure Property Rights: Evidence from Global Fisheries," NBER Working Papers 17019, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:17019
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    References listed on IDEAS

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    1. Richard G. Newell & Kerry L. Papps & James N. Sanchirico, 2007. "Asset Pricing in Created Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(2), pages 259-272.
    2. Myles J. Watts & Jeffrey T. LaFrance, 1994. "Cows, Cowboys, and Controversy: The Grazing Fee Issue," Monash Economics Working Papers archive-24, Monash University, Department of Economics.
    3. Grafton, R Quentin & Squires, Dale & Fox, Kevin J, 2000. "Private Property and Economic Efficiency: A Study of a Common-Pool Resource," Journal of Law and Economics, University of Chicago Press, vol. 43(2), pages 679-713, October.
    4. Markus Goldstein & Christopher Udry, 2008. "The Profits of Power: Land Rights and Agricultural Investment in Ghana," Journal of Political Economy, University of Chicago Press, vol. 116(6), pages 981-1022, December.
    5. Costello, Christopher J. & Kaffine, Daniel, 2008. "Natural resource use with limited-tenure property rights," Journal of Environmental Economics and Management, Elsevier, vol. 55(1), pages 20-36, January.
    6. 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.
    7. Alston, Lee J & Libecap, Gary D & Schneider, Robert, 1996. "The Determinants and Impact of Property Rights: Land Titles on the Brazilian Frontier," Journal of Law, Economics, and Organization, Oxford University Press, vol. 12(1), pages 25-61, April.
    8. Robert T. Deacon & Dominic P. Parker & Christopher Costello, 2010. "Overcoming the common pool problem through voluntary cooperation: the rise and fall of a fishery cooperative," NBER Working Papers 16339, National Bureau of Economic Research, Inc.
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    Cited by:

    1. repec:kap:enreec:v:68:y:2017:i:2:d:10.1007_s10640-016-0017-3 is not listed on IDEAS
    2. Alexandre CROUTZET & Pierre LASSERRE, 2016. "Optimal Completeness of Property Rights on Renewable Resources in Presence of Market Power," Cahiers de recherche 10-2016, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    3. repec:ags:aaea16:236373 is not listed on IDEAS
    4. Rimsaite, Renata & Fisher-Vanden, Karen A. & Olmstead, Sheila M., 2016. "Price Efficiency in U.S. Water Rights Markets," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 243124, Agricultural and Applied Economics Association.
    5. José-María Da-Rocha & Jaume Sempere, 2017. "ITQs, Firm Dynamics and Wealth Distribution: Does Full Tradability Increase Inequality?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(2), pages 249-273, October.
    6. Andrew J. Ropicki & Sherry L. Larkin, 2014. "Social Network Analysis of Price Dispersion in Fishing Quota Lease Markets," Marine Resource Economics, University of Chicago Press, vol. 29(2), pages 157-176.
    7. repec:eee:resene:v:49:y:2017:i:c:p:16-32 is not listed on IDEAS

    More about this item

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • P14 - Economic Systems - - Capitalist Systems - - - Property Rights
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery

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