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Unraveling the Multiple Margins of Rent Generation from Individual Transferable Quotas

Unraveling the Multiple Margins of Rent Generation from Individual Transferable Quotas ABSTRACT: Individual transferable quotas (ITQs) induce changes along both the extensive margin—via consolidation of quota among fewer vessels—and the intensive margin, as harvesters adjust their behavior to ITQ incentives. We use ITQ introduction in the Bering Sea crab fishery to decompose the sources of rent generation across both margins. We embed an empirically calibrated structural model of the harvesting process into a sector-level model, allowing us to experimentally “unravel” the ITQ treatment. We show that the magnitude and source of rent generation under ITQs critically depends on the manner and degree of rent dissipation before ITQs are implemented. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Land Economics University of Wisconsin Press

Unraveling the Multiple Margins of Rent Generation from Individual Transferable Quotas

Land Economics , Volume 90 (3) – Jul 10, 2014

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Publisher
University of Wisconsin Press
Copyright
Copyright by the Board of Regents of the University of Wisconsin System.
ISSN
1543-8325
Publisher site
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Abstract

ABSTRACT: Individual transferable quotas (ITQs) induce changes along both the extensive margin—via consolidation of quota among fewer vessels—and the intensive margin, as harvesters adjust their behavior to ITQ incentives. We use ITQ introduction in the Bering Sea crab fishery to decompose the sources of rent generation across both margins. We embed an empirically calibrated structural model of the harvesting process into a sector-level model, allowing us to experimentally “unravel” the ITQ treatment. We show that the magnitude and source of rent generation under ITQs critically depends on the manner and degree of rent dissipation before ITQs are implemented.

Journal

Land EconomicsUniversity of Wisconsin Press

Published: Jul 10, 2014

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