Community Impacts of Fishery Privatization

The adoption of secure, transferable property rights to a natural resource have efficiency properties appealing to economists, but faces opposition justified by concerns over potential negative impacts on rural communities. Major concerns include the consolidation of vessel ownership, job losses, and changes in community participation, but empirical evidence is limited. This paper examines the impact of the creation of individual transferable quotas (ITQs) to fish for Alaskan halibut and sablefish on rural fishing ports. Using data from the state of Alaska on fish landings, production, and community characteristics, we establish that the expected consolidation occurs in aggregate, and then examine the differential impact on rural communities. Although vessel consolidation is less pronounced in rural communities than larger ports with airport access, we do find limited evidence of reduced taxable sales revenue in rural ports. We examine whether two policies aimed at protecting rural economies—quota transfer restrictions and community development quota—were partially responsible for the limited consolidation in rural ports.