Risk, restrictive quotas, and income smoothing

Robbert-Jan Schaap, Exequiel Gonzalez-Poblete, Karin Loreto Silva Aedo and Florian Diekert
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Robbert-Jan Schaap: CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier
Exequiel Gonzalez-Poblete: Pontifical Catholic University of Valparaiso
Karin Loreto Silva Aedo: AWI - Alfred-Weber-Institute, Department of Economics - Universität Heidelberg [Heidelberg] = Heidelberg University

Working Papers from HAL

Abstract: Income shocks due to climate change or overexploitation can result in severe hardships for natural resource users which are unable to smooth consumption. Artisanal fishers in Chile vary in their ability to smooth consumption due to regulatory differences. Utilizing these regulatory differences, we find that survey participants that harvest species which are governed by restrictive quotas have preferences for more precautionary savings compared to survey participants whose harvest is not restricted. The inability to adjust harvest increases the importance of self-insurance through saving. Especially in developing countries, where formal saving opportunities are limited, policies that aim at stabilizing resource productivity through restrictive quotas need to account for available consumption smoothing strategies to avoid unintended welfare losses.

Keywords: Bioeconomics; Labour flexibility; Property rights; Higher order risk preferences; Precautionary saving; Fisheries (search for similar items in EconPapers)
Date: 2022-09-28
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