Quota Trading and Profitability: Theoretical Models and Applications to Danish Fisheries
Jesper Andersen () and
No 24180, Unit of Economics Working Papers from Royal Veterinary and Agricultural University, Food and Resource Economic Institute
Using Data Envelopment Analysis (DEA), we provide a framework to analyze the potential gains from quota trading. We compare the industry profit and structure before and after a free trade reallocation of production quotas. The effects of tradable production quotas depend on several technological and behavioral characteristics, including the ability to learn best practice (catch-up) and the ability to change the input and output composition (mix). To illustrate the usefulness of our approach, we analyze a dataset from the Danish fishery. We study the industry profit and structure under each of four sets of technological and behavioral characteristics.
Keywords: Agribusiness (search for similar items in EconPapers)
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