The impact of individual quotas on technical efficiency: does quality matter?

Abstract

We estimate the technical efficiency gains of introducing individual quotas (IQs) in fisheries. Our estimates are based on two samples of vessels, considering a potential self-selection bias and controlling for quality changes in landings induced by the IQ system. The results suggest that the introduction of IQs has an important positive impact on fleet efficiency, and that properly measuring this impact requires controlling for the self-selection bias and quality changes induced by the regulatory shift.We are grateful to three anonymous referees of this journal for their helpful comments and suggestions. The usual disclaimer of responsibilities obviously applies. We gratefully acknowledge partial financial support for the revision stage of this paper provided by the Dirección de Investigación, Universidad de Concepción.

Evaluating the impact of individual fishing quotas (IFQs) on the technical efficiency and composition of the US Gulf of Mexico red snapper commercial fishing fleet

“…IFQs can also improve technical efficiency (TE) because fishers can select (manage) freely the optimal combination of inputs to harvest fish. In addition, if shares are tradable, they are expected to gravitate towards the most efficient producers, thereby shedding excess harvesting capacity as marginal producers exit the fishery (Solís et al, in press;Dresdner et al, 2010;Squires et al, 2010;Pascoe and Coglan, 2002;Asche et al, 2009;Brandt, 2007;Weninger, 1998). Moreover, IFQs provide greater certainty about future landings which lowers the financial risk associated with long-term planning and investments.…”