Optimal quota programs
This paper considers the choice among three different types of individual quota programs in a multi-product fishery when technology, prices, and compliance are all uncertain: (1) Aggregated quota, which regulates the total weight of all species; (2) Disaggregated quota, which regulates the weight of each species separately, and (3) Value-based quota, which regulates the total value of all species. The paper first considers the welfare maximization problem in the context of simple stylized models of the fishery. These examples show that different types of quota programs are preferred in different fisheries. To learn which type of quota program should be preferred in an actual fishery, the paper then solves the welfare maximization problem numerically, where uncertainty about prices and technology are described by densities estimated from data on the Scotia-Fundy Cod-Haddock-Pollock fishery. In this application, a disaggregated quota program almost always dominates the other choices, and is at worst slightly inferior to a value-based quota program.
|Date of creation:||11 Jan 1998|
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References listed on IDEAS
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- Harford, Jon D., 1978. "Firm behavior under imperfectly enforceable pollution standards and taxes," Journal of Environmental Economics and Management, Elsevier, vol. 5(1), pages 26-43, March.
- Dale Squires, 1987. "Public Regulation and the Structure of Production in Multiproduct Industries: An Application to the New England Otter Trawl Industry," RAND Journal of Economics, The RAND Corporation, vol. 18(2), pages 232-247, Summer.
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- Malik, Arun S., 1990. "Markets for pollution control when firms are noncompliant," Journal of Environmental Economics and Management, Elsevier, vol. 18(2), pages 97-106, March.
- Turner, Matthew A., 1997. "Quota-Induced Discarding in Heterogeneous Fisheries," Journal of Environmental Economics and Management, Elsevier, vol. 33(2), pages 186-195, June.
- Stavins, Robert N., 1996. "Correlated Uncertainty and Policy Instrument Choice," Journal of Environmental Economics and Management, Elsevier, vol. 30(2), pages 218-232, March.
- Mendelsohn, Robert, 1986. "Regulating heterogeneous emissions," Journal of Environmental Economics and Management, Elsevier, vol. 13(4), pages 301-312, December.
- Matthew A. Turner, 1995. "Value-based ITQ's," Working Papers mturner-95-03, University of Toronto, Department of Economics.
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