annotated bibliography of fisheries economics literature - Office of ...

Evaluating the incentives for disinvestment and industry exit after quota
exchange indicated potential for a concentrated industry structure with the
larger size class. Their quota market would potentially be thin, noisy, and
noncompetitive, requiring restrictions on their quota transferability and
concentration.
Squires, D. (1991). "Individual Transferable Quotas: Theory and an
Application." NMFS, SWFC, Administrative Report LJ-90-16, La
Jolla, CA.
A system of tradeable quotas can regulate production flows or reorganize
an industry suffering from chronic overproduction, excessive numbers of firms,
or overcapitalization. An overall production target is established and firms
are allocated divisible rights to a quantity of the overall production. Firms
maximize profits by adjusting production levels through trade of these
quantitative restrictions while the overall quantity objective is satisfied.
Firms with advantages in costs or capacity utilization can bid quota away from
other firms. Through competition, equilibrium market prices for the quota
develop, where these quota prices reflect the net discounted present value of
the expected stream of future benefits. The initial recipients of tradeable
quota who sell or lease to more efficient firms will enjoy this stream of
future benefits, while the purchaser must pay full value. Both parties gain
from exchange and arbitrage efficiency is realized.
Squires, Dale (1992). "Productivity Measurement in Common Property
Resource Industries: An Application to the Pacific Coast Trawl
Fishery." Rand Journal of Economics, 23(2):221-236.
This article measures total factor productivity in industries that
exploit resources held in common. Particular attention is paid to the
valuation and specification of in situ common property resources in a
neoclassical production technology, catchability of the resource, and
variations in economic capacity utilization. An empirical analysis of the
open access Pacific coast trawl fishing industry demonstrates that
disentangling the productivity residual from changes in resource abundance,
its catchability, and variations in capacity utilization hones the
productivity residual to finer precision, lowering mean productivity growth by
about half. Removing biological noise from highly variable resources is also
important. The results are related to a program limiting the number of
vessels and can contribute to sustainable resource management whenever
resources are held in common.
Squires, Dale (1992). "Individual Transferable Quotas." Draft report,
National Marine Fisheries Service, Southwest Fisheries Science
Center, P.O. Box 271, La Jolla, CA 92038, August, pp. 31.
This paper extends the virtual price framework of Neary and Roberts to
allow trade of individual quotas and other quantitative restrictions on firms.
The approach gives the expected equilibrium market price of the individual
transferable quota, rents, and grains in arbitrage efficiency from quota
trade. Information on costs and technology known best by firms is combined
with overall quantity information known best by regulators to give a uniform
price signal -- the quota price after exchange -- equivalent to a tax uniform
across firms. The framework is also matched with recent advances in
multiproduct capacity utilization to evaluate prospective changes in
multiproduct industry structure following quota trade and implications for the
quota market. The approach is applied to ex ante analyze a potential program
of individual transferable quotas in a common property fishery.
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