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Capacity Utilization under Regulatory Constraints

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  • Segerson, Kathleen
  • Squires, Dale

Abstract

This paper presents a methodology for predicting the effect of quota-type regulatory constraints on capacity utilization for a multiproduct profit-maximizing firm. The approach builds on recent advances in the use of virtual prices to model the effects of rationing. This allows the effects of regulatory constraints to be examined ex ante. The methodology is illustrated through a case stud y of the imposition of output quotas in an open-access marine fishing industry on the Pacific Coast of the United States. The results sugg est that, for certain species, output quotas can cause strong disinvestm ent incentives. Copyright 1993 by MIT Press.

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  • Segerson, Kathleen & Squires, Dale, 1993. "Capacity Utilization under Regulatory Constraints," The Review of Economics and Statistics, MIT Press, vol. 75(1), pages 76-85, February.
    • Handle: RePEc:tpr:restat:v:75:y:1993:i:1:p:76-85
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    Cited by:

    1. Yao-yao Song & Xian-tong Ren & Guo-liang Yang, 2023. "Capacity utilization change over time," Journal of Productivity Analysis, Springer, vol. 59(1), pages 61-78, February.
    2. Ben White, 2000. "A Review of the Economics of Biological Natural Resources," Journal of Agricultural Economics, Wiley Blackwell, vol. 51(3), pages 419-462, September.
    3. Aiken, Deborah Vaughn, 2006. "Application of the distance function to nonmarket valuation of environmental goods and services: An illustrative example," Ecological Economics, Elsevier, vol. 60(1), pages 168-175, November.
    4. Panos Fousekis & Aspasia Papakonstantinou, 1997. "Economic Capacity Utilisation And Productivity Growth In Greek Agriculture," Journal of Agricultural Economics, Wiley Blackwell, vol. 48(1‐3), pages 38-51, January.
    5. Quinn Weninger, 2008. "Economic Benefits of Management Reform in the Gulf of Mexico Grouper Fishery: A Semi-parametric Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 41(4), pages 479-497, December.
    6. Speir, Cameron & Brozovic, Nicholas, 2006. "Supply Response of Commercial Fishermen and Implications for Management of Invasive Asian Carp," 2006 Annual meeting, July 23-26, Long Beach, CA 21225, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Catherine Paul & Marcelo O. Torres & Ronald Felthoven, 2009. "Fishing Revenue, Productivity and Product Choice in the Alaskan Pollock Fishery," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 44(4), pages 457-474, December.
    8. Squires, Dale, 2016. "Firm behavior under quantity controls: The theory of virtual quantities," Journal of Environmental Economics and Management, Elsevier, vol. 79(C), pages 70-86.
    9. Bruno De Borger & Kristiaan Kerstens & Diego Prior & Ignace Van de Woestyne, 2013. "Static efficiency decompositions and capacity utilization: integrating economic and technical capacity notions," Applied Economics, Taylor & Francis Journals, vol. 45(24), pages 3529-3529, August.
    10. H. Kim, 1999. "Economic Capacity Utilization and its Determinants: Theory and Evidence," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 15(4), pages 321-339, December.
    11. 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.
    12. Dale Squires & Kathleen Segerson, 2022. "Capacity and Capacity Utilization in Production Economics," Springer Books, in: Subhash C. Ray & Robert G. Chambers & Subal C. Kumbhakar (ed.), Handbook of Production Economics, chapter 24, pages 1001-1037, Springer.
    13. Kostas Tsekouras & Dimitris Skuras, 2005. "Productive efficiency and exports: an examination of alternative hypotheses for the Greek cement industry," Applied Economics, Taylor & Francis Journals, vol. 37(3), pages 279-291.
    14. Lu, Juan & Li, He, 2022. "Can high-speed rail improve enterprise capacity utilization? A perspective of supply side and demand side," Transport Policy, Elsevier, vol. 115(C), pages 152-163.
    15. Felthoven, Ronald G., 2000. "Measuring Fishing Capacity: An Application To In North Pacific Groundfish Fisheries," 2000 Annual meeting, July 30-August 2, Tampa, FL 21815, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    16. Dengjun Zhang, 2022. "Capacity utilization under credit constraints: A firm‐level study of Latin American manufacturing," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 1367-1386, January.

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