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Resource Rent in Individual Quota Fisheries

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  • Frank Asche
  • Trond Bjørndal
  • Daniel V. Gordon

Abstract

Traditional fisheries management schemes generate incentives for vessels to maximize catch, resulting in rent dissipation and overcapacity. Individual vessel quota management schemes change the incentives to maximize profit and have the potential to generate resource rent and reduce capacity. An interesting question is whether it is the changed incentives due to individual quota or the capacity reduction due to transferability of individual quota that is most important in generating rent. In this study, a cost function approach is used to model and measure rent generated and potential rent in a fishery managed with individual vessel quotas.

Suggested Citation

  • Frank Asche & Trond Bjørndal & Daniel V. Gordon, 2009. "Resource Rent in Individual Quota Fisheries," Land Economics, University of Wisconsin Press, vol. 85(2), pages 279-291.
    • Handle: RePEc:uwp:landec:v:85:y:2009:i:2:p:279-291
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    References listed on IDEAS

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    1. Frank Asche & Helge Bremnes & Cathy R. Wessells, 1999. "Product Aggregation, Market Integration, and Relationships between Prices: An Application to World Salmon Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 568-581.
    2. Kjell Salvanes & Dale Squires, 1995. "Transferable quotas, enforcement costs and typical firms: An empirical application to the Norwegian trawler fleet," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 6(1), pages 1-21, July.
    3. Lau, Lawrence J., 1976. "A characterization of the normalized restricted profit function," Journal of Economic Theory, Elsevier, vol. 12(1), pages 131-163, February.
    4. 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.
    5. Trond Bjørndal & Daniel V. Gordon, 1993. "The Opportunity Cost of Capital and Optimal Vessel Size in the Norwegian Fishing Fleet," Land Economics, University of Wisconsin Press, vol. 69(1), pages 98-107.
    6. 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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    Cited by:

    1. Nils-Arne Ekerhovd & Daniel V. Gordon, 2020. "Profitability, Capacity and Productivity Trends in an Evolving Rights Based Fishery: The Norwegian Purse Seine Fishery," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 77(3), pages 565-591, November.
    2. Frank Asche & Andreea L. Cojocaru & Ruth B. M. Pincinato & Kristin H. Roll, 2020. "Production Risk in the Norwegian Fisheries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 75(1), pages 137-149, January.
    3. Daniel Solís & Julio Corral & Lawrence Perruso & Juan J. Agar, 2015. "Individual fishing quotas and fishing capacity in the US Gulf of Mexico red snapper fishery," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 59(2), pages 288-307, April.
    4. Sigbjorn Tveteras & Carlos Paredes & Julio Peña, 2011. "Individual Fishing Quotas in Peru: Stopping the Race for Anchovies," ILADES-UAH Working Papers inv263, Universidad Alberto Hurtado/School of Economics and Business.
    5. Standal, Dag & Sønvisen, Signe Annie & Asche, Frank, 2016. "Fishing in deep waters: The development of a deep-sea fishing coastal fleet in Norway," Marine Policy, Elsevier, vol. 63(C), pages 1-7.
    6. Dale Squires & Yongil Jeon & R. Quentin Grafton & James Kirkley, 2010. "Controlling excess capacity in common-pool resource industries: the transition from input to output controls ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(3), pages 361-377, July.
    7. 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.
    8. 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.
    9. Naoto Jinji, 2011. "Fisheries Subsidies and Management in Open Economies," Discussion papers e-11-004, Graduate School of Economics Project Center, Kyoto University.
    10. Subal Kumbhakar & Frank Asche & Ragnar Tveteras, 2013. "Estimation and decomposition of inefficiency when producers maximize return to the outlay: an application to Norwegian fishing trawlers," Journal of Productivity Analysis, Springer, vol. 40(3), pages 307-321, December.
    11. Solís, Daniel & del Corral, Julio & Perruso, Larry & Agar, Juan J., 2014. "Evaluating the impact of individual fishing quotas (IFQs) on the technical efficiency and composition of the US Gulf of Mexico red snapper commercial fishing fleet," Food Policy, Elsevier, vol. 46(C), pages 74-83.
    12. Anna M. Birkenbach & Andreea L. Cojocaru & Frank Asche & Atle G. Guttormsen & Martin D. Smith, 2020. "Seasonal Harvest Patterns in Multispecies Fisheries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 75(3), pages 631-655, March.
    13. Andries Richter & Anne Maria Eikeset & Daan Soest & Florian Klaus Diekert & Nils Chr. Stenseth, 2018. "Optimal Management Under Institutional Constraints: Determining a Total Allowable Catch for Different Fleet Segments in the Northeast Arctic Cod Fishery," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 69(4), pages 811-835, April.
    14. Asche, Frank & Smith, Martin D., 2010. "Trade and fisheries: Key issues for the World Trade Organization," WTO Staff Working Papers ERSD-2010-03, World Trade Organization (WTO), Economic Research and Statistics Division.

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    More about this item

    JEL classification:

    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery

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