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Production Efficiency and Exit in Rights-Based Fisheries

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  • Kurt E. Schnier
  • Ronald G. Felthoven

Abstract

Economic theory predicts that the least-efficient vessels are more likely to exit a fishery following the transition to an individual transferable quota (ITQ) management regime. Tools are needed to help analysts predict the likely degree and distribution of consolidation prior to implementing ITQ programs. This research utilizes a one-stage estimation procedure to determine the degree to which one’s technical inefficiency preceding an ITQ regime influences the likelihood of exiting. Our results indicate that a vessel’s measure of technical inefficiency is a significant and positive factor in explaining whether it exits the fishery following the implementation of ITQs.

Suggested Citation

  • Kurt E. Schnier & Ronald G. Felthoven, 2013. "Production Efficiency and Exit in Rights-Based Fisheries," Land Economics, University of Wisconsin Press, vol. 89(3), pages 538-557.
    • Handle: RePEc:uwp:landec:v:89:y:2013:iii:1:p:538-557
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    Cited by:

    1. Sutherland, Sara A. & Edwards, Eric C., 2019. "Community Impacts of Fishery Privatization," CEnREP Working Papers 340061, North Carolina State University, Department of Agricultural and Resource Economics.
    2. 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.
    3. Juan Agar & William C. Horrace & Christopher F. Parmeter, 2022. "Overcapacity in Gulf of Mexico reef fish IFQ fisheries: 12 years after the adoption of IFQs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(2), pages 483-506, June.

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    JEL classification:

    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery

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