An Inverse Demand System for New England Groundfish: Welfare Analysis of the Transition to Catch Share Management

Min-Yang A. Lee and Eric M. Thunberg

No 123879, 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington from Agricultural and Applied Economics Association

Abstract: In 2010, the Northeast groundfish fishery transitioned from an effort-control system (Days-at-Sea) to an output-control system (catch shares). Simultaneously, a large decrease in aggregate catch was imposed in order to achieve biological objectives. This research examines the welfare effects of the transition to catch-share management by combining an inverse demand model for groundfish with a simulation based model of supply. The Generalized Differential Inverse Demand System is estimated for groundfish and imports using monthly data from 1994-2011 using a Generalized Method of Moments estimator. The estimated parameters are combined with simulated landings derived from a counterfactual policy scenario had ef- fort controls been retained instead of the catch share system. The simultaneous management change to catch shares and reduction in aggregate catch reduced consumer welfare by approximately $11M. A counterfactual policy in which the Days-at-Sea system was adjusted to meet the catch reductions would have reduced consumer welfare by approximately $37M; this finding is robust to instrument choice in the demand model. Because the 2010 fishing regulations and the counterfactual regulations were designed with the same conservation goals, the difference, approximately $26M, can be attributed to the change in management institution. Finally, reversion to the Days-at-Sea regulatory structure would reduce consumer welfare by approximately $25M from the current (2010) levels.

Keywords: Demand and Price Analysis; Environmental Economics and Policy; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 35
Date: 2012
New Economics Papers: this item is included in nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/123879/files/l ... oundfish_may2012.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea12:123879

DOI: 10.22004/ag.econ.123879

Access Statistics for this paper

More papers in 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington from Agricultural and Applied Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().