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The Value of Secure Property Rights: Evidence from Global Fisheries

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  • Corbett A. Grainger
  • Christopher Costello

Abstract

Property rights are commonly touted as a solution to common pool resource problems. But in practice the security of these property rights varies substantially owing to differences in design. In fisheries, the design of individual transferable quotas (ITQs) varies widely; the consequences of these design differences on economic outcomes has not been studied. To test whether the security of these property rights affects asset values, we compile a unique dataset to examine the relationship between the exclusivity of property rights and the dividend price ratios for ITQs. We find evidence that stronger property rights lead to higher asset values and lower dividend price ratios in ITQ fisheries. This pecuniary effect of property rights security informs the current policy debate on the design of property rights institutions for managing natural resources.

Suggested Citation

  • Corbett A. Grainger & Christopher Costello, 2011. "The Value of Secure Property Rights: Evidence from Global Fisheries," NBER Working Papers 17019, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:17019
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    Cited by:

    1. José-María Da-Rocha & Jaume Sempere, 2017. "ITQs, Firm Dynamics and Wealth Distribution: Does Full Tradability Increase Inequality?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(2), pages 249-273, October.
    2. Croutzet, Alexandre & Lasserre, Pierre, 2017. "Optimal completeness of property rights on renewable resources in the presence of market power," Resource and Energy Economics, Elsevier, vol. 49(C), pages 16-32.
    3. Rimsaite, Renata & Fisher-Vanden, Karen A. & Olmstead, Sheila M., 2016. "Price Efficiency in U.S. Water Rights Markets," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 243124, Agricultural and Applied Economics Association.
    4. Andrew J. Ropicki & Sherry L. Larkin, 2014. "Social Network Analysis of Price Dispersion in Fishing Quota Lease Markets," Marine Resource Economics, University of Chicago Press, vol. 29(2), pages 157-176.
    5. repec:ags:aaea16:236373 is not listed on IDEAS

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    More about this item

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • P14 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Property Rights
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery

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