Quota Enforcement and Capital Investment in Natural Resource Industries

Lazkano, Itziar

doi:10.1086/686701

Marine Resource Economics

2016

DOI: 10.1086/686701

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Quota Enforcement and Capital Investment in Natural Resource Industries

Itziar Lazkano

Abstract: We investigate the relationship between quota enforcement, compliance, and capital accumulation in ITQ regulated fisheries. Over-extraction and over-capacity represent two of the main fisheries management challenges, and we aim to model and analyze the two jointly. In a stylized resource model, quota violating and complying firms invest in capital, buy quotas, and choose their harvest. We show that in the short run, more capacity increases illegal extraction, while a well-functioning quota market partially all… Show more

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Cited by 4 publications

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The social cost of fishery subsidy reforms

et al. 2017

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This paper analyzes the impact of reducing a subsidy on fuel in a general equilibrium model for a fishery with heterogeneous fishing plants (vessels). It considers the impact of the stock effect, which determines the participation of fishing plants in a likely increased stock abundance. In equilibrium, the productivity of the fleet is endogenous as it depends on the stock of fish along the equilibrium path. The model concludes that any impact of a fuel subsidy drop will depend on the stock effect. If that effect is large, fishing firms will benefit from the stock recovery and the elimination of the subsidy will increase future returns on investment. The model is particularized to industrial shrimp fisheries in Mexico. It is shown that the complete elimination of a subsidy increases biomass, capitalization, marginal productivity, and consumption and reduces inequality when the effect of the induced increase in the stock is considered. However, if that effect is not considered capital and consumption decrease, and inequality increases, increasing the social costs of a fuel subsidy drop.

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The social cost of fishery subsidy reforms

et al. 2017

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The effect of quota portfolio composition on optimal harvest strategy and profitability in a multi-species fishery

Alizadeh Ashrafi,

Hermansen,

Kvamsdal

2023

ICES Journal of Marine Science

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The benefits of individual vessel quota (IVQ) management in terms of improved harvest strategy and profitability are well recognized, but there is less focus on how different components of a quota portfolio can influence decisions underlying the effort allocation and profit-maximizing behaviour of fishers. Variations in the components of the quota portfolio may create economic incentives that alter the optimal harvest strategy and profitability. Thus, we study the potential impact of different components of quota portfolio on the intra-annual harvest strategy and profitability in two segments of the Norwegian bottom trawl fleet. By developing a vessel-based spatio-temporal bioeconomic framework, we demonstrate and compare adopted harvest strategies and accrued profits for small and large trawl vessels under three scenarios regarding restrictive quotas in codfish fishery. Our analysis confirms that alternations in the components of the quota portfolio influence the spatio-temporal dynamics of the fishing effort for small and large trawl vessels in different ways, probably due to the differences in vessel-specific characteristics. We also demonstrate that the differences in profit between small and large vessels in part depend on the overall size of the quota portfolio. The economies of scale in the trawl industry are being eroded as the shares of higher-priced species in the quota portfolio decreases. The benefits of economies of scale cannot be reaped as trawlers respond to the reduction in profit by redirecting effort from offshore areas of the Arctic to nearshore waters or staying ashore. Likewise, having small quotas of high-priced species reduces the effectiveness of the IVQ system in meeting management objectives, and could in some cases undermine sustainability outcomes. Our results also demonstrate that both the intensity with which fishers react to the fluctuations in market price levels and fishers’ perceptions of location attractiveness are influenced by the components of the quota portfolio.

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Pro-Poor Price Trends and Inequality -- The Case of India

Almås

Kjelsrud

2016

SSRN Journal

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It is well known that people's consumption patterns change with income. Relative price changes therefore affect rich and poor consumers differently. Yet, the standard price indices are not income-specific and hence, the use of these mask these differences in cost-of-living. In this paper, we study consumption inequality in India, while fully allowing for non-homotheticity.Our analysis shows that the changes in relative prices in a large part of the period from 1993 to 2012 were pro-poor, in the sense that they favored the poor relative to the rich. As a result, we also find that the standard measures significantly overestimate the rise in real inequality.Moreover, we show that the allowance for non-homotheticity is quantitatively much more important in our application than the adjustment for substitution in consumption, despite the larger attention paid to the latter in the literature. We also illustrate how conventional measures exaggerate inter-temporal changes in inequality when there is segregation in consumption/production, by which we mean that people's consumption patterns are skewed towards goods intensively produced by people of their own group. * Acknowledgements: We are grateful to Erik Sørensen for sharing some of his Python scripts with us.

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Quota Enforcement and Capital Investment in Natural Resource Industries

Cited by 4 publications

References 26 publications

The social cost of fishery subsidy reforms

The social cost of fishery subsidy reforms

The effect of quota portfolio composition on optimal harvest strategy and profitability in a multi-species fishery

Pro-Poor Price Trends and Inequality -- The Case of India

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