Minimum information management systems and ITQ fisheries management

Batstone, Chris; Sharp, Basil

doi:10.1016/s0095-0696(02)00015-3

Cited by 32 publications

(20 citation statements)

References 16 publications

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“…For example, Falk (1991) models farmland prices in Iowa using aggregate price and rent data, and Wilson and Summer (2004) analyze the market for diary quota in California. The same holds for Batstone and Sharp (2003), who investigate a single quota market. Clark, Fulton, and Scott (1993) argue that a cross-sectional comparison of land markets can help illuminate the factors important in understanding the empirical relationship in equation (1).…”

Section: Figure 1 Quota Dividend-price Ratio and Market Interest Ratesmentioning

confidence: 78%

“…For further history and institutional detail, see Batstone and Sharp (1999), Yandle (2001), NSK, and the references cited therein.…”

Section: Background On Nz Itq Systemmentioning

confidence: 99%

“…We extend the analysis of NSK by econometrically examining the relationship between the annual lease and sale prices in the perpetual quota asset markets. A notable exception to the virtually nonexistent literature examining quota prices in fisheries is the paper by Batstone and Sharp (2003), which investigates the relationship between fishing quota sale and lease prices and changes in the total allowable catch for the New Zealand red snapper fishery (region 1). Batstone and Sharp (2003) find support for the relationship proposed by Arnason (1990).…”

mentioning

confidence: 99%

“…A notable exception to the virtually nonexistent literature examining quota prices in fisheries is the paper by Batstone and Sharp (2003), which investigates the relationship between fishing quota sale and lease prices and changes in the total allowable catch for the New Zealand red snapper fishery (region 1). Batstone and Sharp (2003) find support for the relationship proposed by Arnason (1990). Other related research in fisheries includes Karpoff (1984aKarpoff ( , 1984bKarpoff ( , 1995 and Huppert, Ellis, and Noble (1996), who look at the relationship between license prices and fishery rents in Alaska salmon fisheries.…”

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confidence: 99%

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Asset Pricing in Created Markets

Newell

Papps

Sanchirico

2007

American J Agri Economics

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We investigate the applicability of the present-value asset pricing model to fishing quota markets by applying instrumental variable panel data estimation techniques to 15 years of market transactions from New Zealand's individual transferable quota (ITQ) market. In addition to the influence of current fishing rents, we explore the effect of market interest rates, risk, and expected changes in future rents on quota asset prices. The results indicate that quota asset prices are positively related to declines in interest rates, lower levels of risk, expected increases in future fish prices, and expected cost reductions from rationalization under the quota system.Key words: asset pricing, fishery management, tradable permits. DOI: 10.1111DOI: 10. /j.1467DOI: 10. -8276.2007 Although recent experience with the sulfur dioxide trading program in the United States has changed many perceptions, there are still questions about how well tradable permit systems for environmental pollution, greenhouse gases, agricultural production, and natural resources can work in practice. Such skepticism is in part warranted by the limited number of ex post assessments on the performance of created markets. Because building the necessary institutions can require significant political and economic costs, it is imperative to develop an empirical record of the performance of created markets in practice.One area where market-based systems are subject to a significant degree of skepticism is in the management of ocean fisheries. One such system is individual fishing quotas, in which the total catch is capped and shares of the catch are allocated. An individual transferable quota (ITQ) system results when transfer of the shares is permitted. Over time, the least efficient fishermen should find it more profitable to sell their quota rather than fish it, both reducing excess capacity and increasing the efficiency of vessels operating in the fishery. We are grateful to Suzi Kerr, the research assistants at Motu Economic and Public Policy Research (New Zealand) and Resources for the Future, and the New Zealand Ministry of Fisheries for the provision of confidential trading data. We also thank Resources for the Future and the New Zealand Ministry of Fisheries for providing funding for this research.For ITQs to address the common pool problem in practice, it is important that quota markets are competitive and convey appropriate price signals. Price signals sent through the quota market are an essential source of information on the expected profitability of fishing and an important criterion for decisions to enter, exit, expand, or contract individual fishing activity. Quota prices also send signals to policymakers about the economic and biological health of a fishery. Arnason (1990) showed that under the assumption of competitive markets, monitoring the effect of changing the total allowable catch (TAC) on quota prices could be used to determine the optimal TAC.In a previous study, Newell, Sanchirico, and Kerr (2005) (hereafter NSK) investigate the ...

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Section: Figure 1 Quota Dividend-price Ratio and Market Interest Ratesmentioning

confidence: 78%

“…For further history and institutional detail, see Batstone and Sharp (1999), Yandle (2001), NSK, and the references cited therein.…”

Section: Background On Nz Itq Systemmentioning

confidence: 99%

mentioning

confidence: 99%

mentioning

confidence: 99%

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Asset Pricing in Created Markets

Newell

Papps

Sanchirico

2007

American J Agri Economics

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“…Danielsson, 2000), others argue that the ongoing government role is incompatible with the market logic. For example, Batstone and Sharp (2003) draw on the work of Hayek to argue that regulators should not set total catch levels, because they have to rely on imperfect and incomplete information to do so. Instead, quota prices contain most of the information necessary for setting total allowable catches.…”

Section: Tradable Quotasmentioning

confidence: 99%