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The Effects of ITQ Management on Fishermen’s Welfare When the Processing Sector is Imperfectly Competitive

Author

Listed:
  • David M. McEvoy

    (Department of Resource Economics, University of Massachusetts Amherst)

  • Sylvia Brandt
  • Nathalie Lavoie

    (Department of Resource Economics, University of Massachusetts Amherst)

  • Sven Anders

    (Department of Rural Economy, University of Alberta Edmonton)

Abstract

In this paper we use a general model of imperfect competition to predict welfare changes within an open-access fishery transitioning to individual transferable quota (ITQ) management. Although related research has explored the effects of market power in the harvesting sector on ITQ performance, none have considered the implications of an imperfectly competitive processing sector. This study addresses this question specifically in the context of the Atlantic herring fishery, although its implications are relevant to all fisheries with similar industry structure. Our results show that ITQs could have a negative impact on fishermen’s welfare when processors have market power and the cap on aggregate harvest is binding or becomes binding with the implementation of ITQs.

Suggested Citation

  • David M. McEvoy & Sylvia Brandt & Nathalie Lavoie & Sven Anders, 2007. "The Effects of ITQ Management on Fishermen’s Welfare When the Processing Sector is Imperfectly Competitive," Working Papers 2007-3, University of Massachusetts Amherst, Department of Resource Economics.
    • Handle: RePEc:dre:wpaper:2007-3
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    Cited by:

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    2. Mukherjee, Zinnia, 2015. "An economic approach to understanding the international transfer of bycatch from unilateral bycatch reduction policies," Marine Policy, Elsevier, vol. 51(C), pages 190-195.

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    More about this item

    Keywords

    ITQ; imperfect competition; welfare analysis; fisheries;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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