Economics without Free-disposal: Quota-induced Discarding in Heterogenous Fisheries

Matthew Turner

Working Papers from University of Toronto, Department of Economics

Abstract: Individual quota (IQ) programs are a promising and increasingly common means of regulating fisheries. This paper examines how profit maximizing fishers respond to different types of IQ programs in fisheries where many types of fish are harvested simultaneously. This analysis shows that the most common types of individual quota programs can induce discarding, and that individual quota programs that regulate the value of harvest never induce discarding. Since discarded fish have a high mortality rate, "value-based" individual quota programs are superior to their more conventional counterparts in that they waste fewer fish. The disadvantages of value-based quotas are also examined. Results are driven by the fact that the harvest technology examined here does not satisfy a "free-disposal" assumption. Since this free-disposal assumption is ubiquitous in production theory, and not obviously true, the framework developed herein may be useful for analysing a broad class of problems involving joint production.

JEL-codes: D24 K32 Q22 (search for similar items in EconPapers)
Pages: 21 pages
Date: 1995-12-05
New Economics Papers: this item is included in nep-agr, nep-eff, nep-env, nep-law and nep-pub
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:tor:tecipa:mturner-95-02

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