IDEAS home Printed from https://ideas.repec.org/a/ags/aareaj/116929.html
   My bibliography  Save this article

Capacity reduction, quota trading and productivity: the case of a fishery

Author

Listed:
  • Fox, Kevin J.
  • Grafton, R. Quentin
  • Kompas, Tom
  • Che, Tuong Nhu

Abstract

We present the first ex post study that quantitatively analyses the effects of a licence buyback and enhanced quota trading on the profitability and productivity of individual vessels in a fishery. Using firm-level data and a profit index decomposition method, we find that small and large vessels and three different trawler fleets all experienced substantial productivity gains in the year immediately following a licence buy-back and the establishment of a quota brokerage service. The apparent ongoing benefits of the buy-back and increased quota trading over the sample period are in stark contrast to the generally unfavourable long-term outcomes commonly associated with vessel buy-backs in input-controlled fisheries.

Suggested Citation

  • Fox, Kevin J. & Grafton, R. Quentin & Kompas, Tom & Che, Tuong Nhu, 2006. "Capacity reduction, quota trading and productivity: the case of a fishery," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(2), pages 1-18, June.
    • Handle: RePEc:ags:aareaj:116929
    DOI: 10.22004/ag.econ.116929
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/116929/files/j.1467-8489.2006.00331.x.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.116929?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Balk, Bert M., 2004. "Decompositions of Fisher indexes," Economics Letters, Elsevier, vol. 82(1), pages 107-113, January.
    2. Sean Pascoe & Louisa Coglan, 2002. "The Contribution of Unmeasurable Inputs to Fisheries Production: An Analysis of Technical Efficiency of Fishing Vessels in the English Channel," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(3), pages 585-597.
    3. 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.
    4. Stavins Robert N., 1995. "Transaction Costs and Tradeable Permits," Journal of Environmental Economics and Management, Elsevier, vol. 29(2), pages 133-148, September.
    5. Fuss, Melvyn & McFadden, Daniel, 1978. "Production Economics: A Dual Approach to Theory and Applications (I): The Theory of Production," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, volume 1, number fuss1978.
    6. Tom Kompas & Tuong Che, 2005. "Efficiency Gains and Cost Reductions from Individual Transferable Quotas: A Stochastic Cost Frontier for the Australian South East Fishery," Journal of Productivity Analysis, Springer, vol. 23(3), pages 285-307, July.
    7. Fuss, Melvyn & McFadden, Daniel, 1978. "Production Economics: A Dual Approach to Theory and Applications (II): Applications of the Theory of Production," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, volume 2, number fuss1978a.
    8. Jin, Di & Thunberg, Eric & Kite-Powell, Hauke & Blake, Kevin, 2002. "Total Factor Productivity Change in the New England Groundfish Fishery: 1964-1993," Journal of Environmental Economics and Management, Elsevier, vol. 44(3), pages 540-556, November.
    9. Fox, Kevin J. & Grafton, R. Quentin & Kirkley, James & Squires, Dale, 2003. "Property rights in a fishery: regulatory change and firm performance," Journal of Environmental Economics and Management, Elsevier, vol. 46(1), pages 156-177, July.
    10. Diewert, W. Erwin, 1978. "Hick's Aggregation Theorem and the Existence of a Real Value Added Function," Histoy of Economic Thought Chapters, in: Fuss, Melvyn & McFadden, Daniel (ed.),Production Economics: A Dual Approach to Theory and Applications, volume 2, chapter 2, McMaster University Archive for the History of Economic Thought.
    11. 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).
    12. Fuss, Melvyn & McFadden, Daniel (ed.), 1978. "Production Economics: A Dual Approach to Theory and Applications," Elsevier Monographs, Elsevier, edition 1, number 9780444850133.
    13. Allen, Robert C & Diewert, W Erwin, 1981. "Direct versus Implicit Superlative Index Number Formulae," The Review of Economics and Statistics, MIT Press, vol. 63(3), pages 430-435, August.
    14. James Kirkley & Catherine Morrison Paul & Dale Squires, 2002. "Capacity and Capacity Utilization in Common-pool Resource Industries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 22(1), pages 71-97, June.
    15. Holland, Dan & Gudmundsson, Eyjolfur & Gates, John, 1999. "Do fishing vessel buyback programs work: A survey of the evidence," Marine Policy, Elsevier, vol. 23(1), pages 47-69, January.
    16. Kevin J. Fox & Ulrich Kohli & Ronald S. Warren Jr., 2002. "Accounting for Growth and Output Gaps: Evidence from New Zealand," The Economic Record, The Economic Society of Australia, vol. 78(242), pages 312-326, September.
    17. Fox, Kevin J & Kohli, Ulrich & Warren, Ronald S, Jr, 2002. "Accounting for Growth and Output Gaps: Evidence from New Zealand," The Economic Record, The Economic Society of Australia, vol. 78(242), pages 312-326, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Vieria, Simon, 2011. "An index number decomposition of profit change in two Australian fishing sectors," 2011 Conference (55th), February 8-11, 2011, Melbourne, Australia 100728, Australian Agricultural and Resource Economics Society.
    2. Mamula, Aaron & Collier, Trevor, 2015. "Multifactor productivity, environmental change, and regulatory impacts in the U.S. West Coast groundfish trawl fishery, 1994–2013," Marine Policy, Elsevier, vol. 62(C), pages 326-336.
    3. Stephan, Mary, 2013. "Trends in total factor productivity of five key Commonwealth managed fisheries," 2013 Conference (57th), February 5-8, 2013, Sydney, Australia 152180, Australian Agricultural and Resource Economics Society.
    4. Gabriel Natividad, 2016. "Quotas, Productivity, and Prices: The Case of Anchovy Fishing," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 25(1), pages 220-257, March.
    5. Walden, John & Fissel, Ben & Squires, Dale & Vestergaard, Niels, 2015. "Productivity change in commercial fisheries: An introduction to the special issue," Marine Policy, Elsevier, vol. 62(C), pages 289-293.
    6. Skirtun, Maggie, 2013. "Decomposing the drivers of profibility in two key Commonwealth prawn fisheries," 2013 Conference (57th), February 5-8, 2013, Sydney, Australia 152179, Australian Agricultural and Resource Economics Society.
    7. Grafton, R. Quentin & Akter, Sonia & Kompas, Tom, 2009. "Guide to the Ex-Ante Socio-Economic Evaluation of Marine Protected Areas," Research Reports 94827, Australian National University, Environmental Economics Research Hub.
    8. Solis, Daniel & Agar, Juan & del Corral, Julio, 2015. "The impact of IFQs on the productivity of the US Gulf of Mexico Red Snapper Fishery," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 196639, Southern Agricultural Economics Association.
    9. Sean Pascoe & Trevor Hutton & Eriko Hoshino & Miriana Sporcic & Satoshi Yamasaki & Tom Kompas, 2020. "Effectiveness of harvest strategies in achieving multiple management objectives in a multispecies fishery," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(3), pages 700-723, July.
    10. Färe, Rolf & Grosskopf, Shawna & Walden, John, 2015. "Productivity change and fleet restructuring after transition to individual transferable quota management," Marine Policy, Elsevier, vol. 62(C), pages 318-325.
    11. Clay, Patricia M. & Kitts, Andrew & Pinto da Silva, Patricia, 2014. "Measuring the social and economic performance of catch share programs: Definition of metrics and application to the U.S. Northeast Region groundfish fishery," Marine Policy, Elsevier, vol. 44(C), pages 27-36.
    12. Pascoe, Sean & Vieira, Simon & Dichmont, Catherine M. & Punt, Andre´ E., 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 1-19.
    13. Thunberg, Eric & Walden, John & Agar, Juan & Felthoven, Ron & Harley, Abigail & Kasperski, Stephen & Lee, Jean & Lee, Todd & Mamula, Aaron & Stephen, Jessica & Strelcheck, Andy, 2015. "Measuring changes in multi-factor productivity in U.S. catch share fisheries," Marine Policy, Elsevier, vol. 62(C), pages 294-301.
    14. Fissel, Benjamin E. & Felthoven, Ronald G. & Kasperski, Stephen & O’Donnell, Christopher, 2015. "Decomposing productivity and efficiency changes in the Alaska head and gut factory trawl fleet," Marine Policy, Elsevier, vol. 62(C), pages 337-346.
    15. Solís, Daniel & Agar, Juan J. & del Corral, Julio, 2015. "IFQs and total factor productivity changes: The case of the Gulf of Mexico red snapper fishery," Marine Policy, Elsevier, vol. 62(C), pages 347-357.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kevin J. Fox & R. Quentin Grafton & Tom Kompas & Tuong Nhu Che, 2003. "Productivity and capacity reduction: the case of a fishery," International and Development Economics Working Papers idec03-2, International and Development Economics.
    2. Kevin J. Fox & R. Quentin Grafton & Tom Kompas & Tuong Nhu Che, 2003. "Capacity Reduction and Productivity: The Case of Fishery," Economics and Environment Network Working Papers 0303, Australian National University, Economics and Environment Network.
    3. James Harrigan, 1997. "Cross-country comparisons of industry total factor productivity: theory and evidence," Research Paper 9734, Federal Reserve Bank of New York.
    4. Hiroaki HAYAKAWA, 2016. "Theory of the Firm: A Reformulation with Primary Factors of Production and Procurement of Ingredient Inputs," Journal of Economics and Political Economy, KSP Journals, vol. 3(3), pages 418-439, September.
    5. Harrigan, James, 1997. "Technology, Factor Supplies, and International Specialization: Estimating the Neoclassical Model," American Economic Review, American Economic Association, vol. 87(4), pages 475-494, September.
    6. Richmond, J, 2000. "Separability and Specification Tests," Economics Discussion Papers 8832, University of Essex, Department of Economics.
    7. Pascoe, Sean & Hutton, Trevor & Coglan, Louisa & Nguyen, Van Quang, 2018. "Implications of efficiency and productivity change over the season for setting MEY-based trigger targets," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 62(2), April.
    8. Diekert , Florian & Lund , Kristen & Schweder, Tore, 2014. "From Open-Access to Individual Quotas: Disentangling the Effects of Policy Reform and Environmental Changes in the Norwegian Coastal Cod Fishery," Memorandum 07/2014, Oslo University, Department of Economics.
    9. Sahoo, A., 2008. "Essays on the Indian economy : Competitive pressure, productivity and performance," Other publications TiSEM 374e9035-815c-43fe-a68e-e, Tilburg University, School of Economics and Management.
    10. Mertens, Matthias, 2019. "Micro-mechanisms behind declining labour shares: Market power, production processes, and global competition," IWH-CompNet Discussion Papers 3/2019, Halle Institute for Economic Research (IWH).
    11. Elie Appelbaum, 1999. "The Effects of Population Diversity on Productivity, Competitiveness and Employment," Working Papers 1999_15, York University, Department of Economics.
    12. Barnett, William A. & Serletis, Apostolos, 2008. "Consumer preferences and demand systems," Journal of Econometrics, Elsevier, vol. 147(2), pages 210-224, December.
    13. Jacob A. Bikker & Barbara Casu & Claudia Girardone & Mohamed E Chaffai & Michel Dietsch & Antonio Colangelo & Robert Inklaar & Marco Colagiovanni & Martin Czurda & Roger Hartmann & Charles-Henri Di Ma, 2009. "Productivity in the Financial Services Sector," SUERF Studies, SUERF - The European Money and Finance Forum, number 2009/4 edited by Morten Balling & Ernest Gnan & Frank Lierman & Jean-Pierre Schoder, May.
    14. Kala Krishna & Marie Thursby, 1994. "Structural Flexibility: A Partial Ordering," NBER Working Papers 4615, National Bureau of Economic Research, Inc.
    15. Klepper, Gernot, 1984. "Endogenous tariff formation in a political market for protection," Kiel Working Papers 224, Kiel Institute for the World Economy (IfW Kiel).
    16. repec:hal:spmain:info:hdl:2441/2041 is not listed on IDEAS
    17. Richard Fabling & David C Maré, 2015. "Production function estimation using New Zealand’s Longitudinal Business Database," Working Papers 15_15, Motu Economic and Public Policy Research.
    18. Bjarne Jensen & Paul Boer & Jan Daal & Peter Jensen, 2011. "Global restrictions on the parameters of the CDES indirect utility function," Journal of Economics, Springer, vol. 102(3), pages 217-235, April.
    19. Josep Mª Argilés Bosch & Josep García Blandón, 2011. "The influence of size on cost behaviour associated with tactical and operational flexibility," Estudios de Economia, University of Chile, Department of Economics, vol. 38(2 Year 20), pages 419-455, December.
    20. Hisnanick, John J. & Kymn, Kern O., 1999. "Modeling economies of scale: the case of US electric power companies," Energy Economics, Elsevier, vol. 21(3), pages 225-237, June.
    21. Gabriele Dono & Luca Giraldo & Simone Severini, 2012. "The Cost of Irrigation Water Delivery: An Attempt to Reconcile the Concepts of Cost and Efficiency," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 26(7), pages 1865-1877, May.

    More about this item

    Keywords

    Productivity Analysis;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aareaj:116929. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaresea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.