IDEAS home Printed from https://ideas.repec.org/a/eee/ecolec/v159y2019icp279-290.html
   My bibliography  Save this article

Structure and evolution of cod quota market networks in Iceland over times of financial volatility

Author

Listed:
  • Oostdijk, Maartje
  • Santos, Maria J.
  • Agnarsson, Sveinn
  • Woods, Pamela J.

Abstract

The quota market is the instrument through which fishing operations under an individual transferable quota (ITQ) system achieve greater efficiency. It allows fishing companies to optimally configure their quota portfolios to their catches. Globally, fisheries corresponding to ~25% of landings have adopted ITQ systems. However, there is surprisingly little empirical information on quota markets functioning. Here we study the development of quota share and lease markets and assess market activity and functioning for the cod fishery in Iceland. We use a social network analysis to assess changes in four Icelandic quota markets, distinguished by boat size (large versus small) and permanence of transfers (leases versus shares). The quota market for permanent trades in small-boat quota shows a sharp increase in trade and network connectivity between 2004 and 2006, resulting in a high rate of quota concentration. The quota markets for permanent quota shares were the most fragmented and sparse during the years of the financial crash in Iceland and never regain the same activity. Our results suggest that quota systems evolve towards a consolidated state and that their markets are not entirely resilient to financial instability. We also found some evidence that better-connected traders could sell quota at higher prices in the lease markets, though price dispersion was generally low.

Suggested Citation

  • Oostdijk, Maartje & Santos, Maria J. & Agnarsson, Sveinn & Woods, Pamela J., 2019. "Structure and evolution of cod quota market networks in Iceland over times of financial volatility," Ecological Economics, Elsevier, vol. 159(C), pages 279-290.
    • Handle: RePEc:eee:ecolec:v:159:y:2019:i:c:p:279-290
    DOI: 10.1016/j.ecolecon.2019.01.035
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S092180091830380X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ecolecon.2019.01.035?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Newell, Richard G. & Sanchirico, James N. & Kerr, Suzi, 2005. "Fishing quota markets," Journal of Environmental Economics and Management, Elsevier, vol. 49(3), pages 437-462, May.
    2. Pinkerton, Evelyn & Edwards, Danielle N., 2010. "Ignoring market failure in quota leasing?," Marine Policy, Elsevier, vol. 34(5), pages 1110-1114, September.
    3. van Putten, Ingrid & Gardner, Caleb, 2010. "Lease quota fishing in a changing rock lobster industry," Marine Policy, Elsevier, vol. 34(5), pages 859-867, September.
    4. Starkey, Richard, 2012. "Personal carbon trading: A critical survey Part 2: Efficiency and effectiveness," Ecological Economics, Elsevier, vol. 73(C), pages 19-28.
    5. Batstone, C. J. & Sharp, B. M. H., 2003. "Minimum information management systems and ITQ fisheries management," Journal of Environmental Economics and Management, Elsevier, vol. 45(2, Supple), pages 492-504, March.
    6. Asche, Frank & Eggert, Håkan & Gudmundsson, Eyjolfur & Hoff, Ayoe & Pascoe, Sean, 2008. "Fisher's behaviour with individual vessel quotas--Over-capacity and potential rent: Five case studies," Marine Policy, Elsevier, vol. 32(6), pages 920-927, November.
    7. Karl E. Case & Robert J. Shiller, 2003. "Is There a Bubble in the Housing Market?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 34(2), pages 299-362.
    8. Pinkerton, Evelyn & Edwards, Danielle N., 2009. "The elephant in the room: The hidden costs of leasing individual transferable fishing quotas," Marine Policy, Elsevier, vol. 33(4), pages 707-713, July.
    9. Sanchirico, James N. & Holland, Daniel & Quigley, Kathryn & Fina, Mark, 2006. "Catch-quota balancing in multispecies individual fishing quotas," Marine Policy, Elsevier, vol. 30(6), pages 767-785, November.
    10. Edella Schlager & Elinor Ostrom, 1992. "Property-Rights Regimes and Natural Resources: A Conceptual Analysis," Land Economics, University of Wisconsin Press, vol. 68(3), pages 249-262.
    11. Starkey, Richard, 2012. "Personal carbon trading: A critical survey," Ecological Economics, Elsevier, vol. 73(C), pages 7-18.
    12. Grainger, Corbett A. & Costello, Christopher J., 2014. "Capitalizing property rights insecurity in natural resource assets," Journal of Environmental Economics and Management, Elsevier, vol. 67(2), pages 224-240.
    13. Elizabeth A Fulton & Anthony D M Smith & David C Smith & Penelope Johnson, 2014. "An Integrated Approach Is Needed for Ecosystem Based Fisheries Management: Insights from Ecosystem-Level Management Strategy Evaluation," PLOS ONE, Public Library of Science, vol. 9(1), pages 1-16, January.
    14. Anna M. Birkenbach & David J. Kaczan & Martin D. Smith, 2017. "Catch shares slow the race to fish," Nature, Nature, vol. 544(7649), pages 223-226, April.
    15. 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.
    16. Loch, Adam & Wheeler, Sarah Ann & Settre, Claire, 2018. "Private Transaction Costs of Water Trade in the Murray–Darling Basin," Ecological Economics, Elsevier, vol. 146(C), pages 560-573.
    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. Byrne, Conor & Oostdijk, Maartje & Agnarsson, Sveinn & Davidsdottir, Brynhildur, 2024. "The Transitional Gains Trap in Grandfathered Individual Transferable Quota Fisheries," Ecological Economics, Elsevier, vol. 215(C).

    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. Aaron Hatcher, 2022. "A Model of Quota Prices in a Multispecies Fishery with “Choke” Species and Discarding," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(4), pages 825-846, August.
    2. repec:ags:aaea22:335749 is not listed on IDEAS
    3. Pinkerton, Evelyn, 2015. "The role of moral economy in two British Columbia fisheries: Confronting neoliberal policies," Marine Policy, Elsevier, vol. 61(C), pages 410-419.
    4. Byrne, Conor & Oostdijk, Maartje & Agnarsson, Sveinn & Davidsdottir, Brynhildur, 2024. "The Transitional Gains Trap in Grandfathered Individual Transferable Quota Fisheries," Ecological Economics, Elsevier, vol. 215(C).
    5. 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.
    6. Holland, Daniel S. & Thunberg, Eric & Agar, Juan & Crosson, Scott & Demarest, Chad & Kasperski, Stephen & Perruso, Larry & Steiner, Erin & Stephen, Jessica & Strelcheck, Andy & Travis, Mike, 2015. "US catch share markets: a review of data availability and impediments to transparent markets," Marine Policy, Elsevier, vol. 57(C), pages 103-110.
    7. Holzer, Jorge & McConnell, Kenneth, 2023. "Extraction rights allocation with liquidity constraints," Resource and Energy Economics, Elsevier, vol. 71(C).
    8. Soliman, Adam, 2014. "Using individual transferable quotas (ITQs) to achieve social policy objectives: A proposed intervention," Marine Policy, Elsevier, vol. 45(C), pages 76-81.
    9. Daoyan Guo & Hong Chen & Ruyin Long, 2019. "What Role Should Government Play in the Personal Carbon Trading Market: Motivator or Punisher?," IJERPH, MDPI, vol. 16(11), pages 1-16, May.
    10. Zhao, Xin-gang & Wu, Lei & Li, Ang, 2017. "Research on the efficiency of carbon trading market in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 79(C), pages 1-8.
    11. Büchs, Milena & Schnepf, Sylke V., 2013. "Who emits most? Associations between socio-economic factors and UK households' home energy, transport, indirect and total CO2 emissions," Ecological Economics, Elsevier, vol. 90(C), pages 114-123.
    12. Pomeroy, Caroline & Hall-Arber, Madeleine & Conway, Flaxen, 2015. "Power and perspective: Fisheries and the ocean commons beset by demands of development," Marine Policy, Elsevier, vol. 61(C), pages 339-346.
    13. Newell, Richard G. & Papps, Kerry L. & Sanchirico, James N., 2005. "Asset Pricing in Created Markets for Fishing Quotas," Discussion Papers 10639, Resources for the Future.
    14. Anderson, Blake & M'Gonigle, Michael, 2012. "Does ecological economics have a future?," Ecological Economics, Elsevier, vol. 84(C), pages 37-48.
    15. Ropicki, Andrew & Larkin, Sherry, 2015. "Implied Discount Rates in the Gulf of Mexico Commercial Red Snapper IFQ Program," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205711, Agricultural and Applied Economics Association.
    16. Fan, Jin & Wang, Shanyong & Wu, Yanrui & Li, Jun & Zhao, Dingtao, 2015. "Buffer effect and price effect of a personal carbon trading scheme," Energy, Elsevier, vol. 82(C), pages 601-610.
    17. Barbara Hutniczak & Niels Vestergaard & Dale Squires, 2019. "Policy Change Anticipation in the Buyback Context," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(1), pages 111-132, May.
    18. Grainger, Corbett A. & Costello, Christopher J., 2014. "Capitalizing property rights insecurity in natural resource assets," Journal of Environmental Economics and Management, Elsevier, vol. 67(2), pages 224-240.
    19. Tan, Xueping & Wang, Xinyu & Zaidi, Syed Haider Ali, 2019. "What drives public willingness to participate in the voluntary personal carbon-trading scheme? A case study of Guangzhou Pilot, China," Ecological Economics, Elsevier, vol. 165(C), pages 1-1.
    20. Fan, Jin & Li, Jun & Wu, Yanrui & Wang, Shanyong & Zhao, Dingtao, 2016. "The effects of allowance price on energy demand under a personal carbon trading scheme," Applied Energy, Elsevier, vol. 170(C), pages 242-249.
    21. Raux, Charles & Chevalier, Amandine & Bougna, Emmanuel & Hilton, Denis, 2021. "Mobility choices and climate change: Assessing the effects of social norms, emissions information and economic incentives," Research in Transportation Economics, Elsevier, vol. 90(C).

    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:eee:ecolec:v:159:y:2019:i:c:p:279-290. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolecon .

    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.