Optimal Management Under Institutional Constraints: Determining a Total Allowable Catch for Different Fleet Segments in the Northeast Arctic Cod Fishery

Andries Richter*, Anne Maria Eikeset, Daan van Soest, Florian Klaus Diekert, Nils Chr Stenseth

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

3 Citations (Scopus)

Abstract

Many real world fisheries have an individual vessel quota system with restrictions on transferability of quota or entrance of new vessels into the fishery. While the standard economic reasoning is that these institutional constraints lead to welfare losses, the size of those losses and optimal second-best policies are usually unknown. We develop a dynamic bioeconomic model, in which a scientific body provides an optimal TAC given restrictions on (i) transferability between vessel segments and (ii) entrance of new vessels. Further, we also quantify welfare losses arising from not maximizing economic welfare, but physical yield—which is actually the case in many fisheries. We apply the model to the Northeast Arctic cod fishery, and estimate not only the cost and harvesting functions of the various vessel types, but also the parameters of the biological model as well as those of the demand function. This allows us to determine optimal second-best policies and quantify corresponding welfare effects for our case study fishery.
Original languageEnglish
Pages (from-to)811-835
JournalEnvironmental and Resource Economics
Volume69
Issue number4
Early online date16 Jan 2017
DOIs
Publication statusPublished - Apr 2018

Keywords

  • Dynamic optimization
  • Fleet segments
  • Group quota
  • ITQs
  • Second-best policy
  • Tradable permits

Fingerprint Dive into the research topics of 'Optimal Management Under Institutional Constraints: Determining a Total Allowable Catch for Different Fleet Segments in the Northeast Arctic Cod Fishery'. Together they form a unique fingerprint.

  • Cite this