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Investment behaviour in individual nontransferable quota systems

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  • Frank Jensen
  • Jesper Andersen
  • Carsten Lynge Jensen

Abstract

This article studies the investment behaviour of the Danish demersal fishery in the North Sea. For the study period, this fishery is regulated by variants of individual nontransferable quotas. It is shown that interest rates and capital stocks are primary determinants of investments. Another conclusion is that an aggregated model based on the whole fleet gives identical results to models based on individual fleets (disaggregated models) for trawlers and Danish seiners. However, for netters and other vessels, the aggregated and disaggregated models yield different results. In addition, the variance of the estimated parameters is lower in the disaggregated models. This result arises because vessels in the disaggregated models are more homogeneous. Furthermore, investments in machinery, electronics and vessels are governed by one year lagged variables, while investment in gears is governed by present variables for the Danish demersal fishery in the North Sea.

Suggested Citation

  • Frank Jensen & Jesper Andersen & Carsten Lynge Jensen, 2012. "Investment behaviour in individual nontransferable quota systems," Applied Economics, Taylor & Francis Journals, vol. 44(8), pages 969-978, March.
    • Handle: RePEc:taf:applec:44:y:2012:i:8:p:969-978
    DOI: 10.1080/00036846.2010.528371
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    Cited by:

    1. Ingrid van Putten & Emmanuelle Quillérou & Olivier Guyader, 2012. "How constrained? Entry into the French Atlantic fishery through second-hand vessel purchase," Post-Print hal-00815455, HAL.

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