Analyzing Separation and Weight of Partial Equilibrium Welfare Effects and Spillover Effects of Restriction on the Fishery Market

Abstract

The purpose of this paper is to analyze theoretically and empirically spillover effects of fishery quota on related markets through their demand curves. Theoretically, the spillover effects of a change in quota can be captured through the directly distorted market alone by computing surpluses associated with the new and old equilibrium. This study estimates empirically demand functions in the context of both the partial equilibrium and general equilibrium. The spillover effect can be computed from the difference between these two estimates. The econometric methodology to estimate the demand curves in the context of general equilibrium is presented and illustrated. The empirical result of fishery markets shows that spillover effects transmitted across other markets are not small and approximately account for 43.3% of the partial equilibrium welfare effects.