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MFBUNRR
Modelling fishermen's behaviour under new regulatory regimes

The main objective of this project is to determine the most appropriate methodologies for modelling fishermen's behaviour under regulatory schemes with individual quotas, independent of transferability. In particular, the project aims at showing how relevant measures can be derived from a cost function. Moreover, since the functional form used when estimating the cost function is important, with respect to whether explicit measures can be provided rather then numerical solutions, it is important to explore the properties of different functional forms. Using this methodology, we will investigate rent dissipation and capacity issues in fisheries in Denmark, Iceland, Norway, Sweden and the United Kingdom.

Objectives
The first objective of the project is to provide a review of the relevant literature. There are a few studies that give information with respect to resource rent, optimal vessel size and optimal fleet size in a fishery, and how measures that are useful in empirical analysis can be derived from profit functions. Other elements of the production technology are also important. Based on this review, it will show how similar measures can be derived from a cost function.
The properties of the functional form used are important as this, to a large extent, determines what information one can obtain. In particular, the commonly used translog does not allow explicit solutions for the levels of the quasi-fixed factors. This is important, since one must model the factors one believes are employed at sub-optimal levels as fixed to obtain information about optimal levels. The generalised Leontief has also been much used in the fisheries literature and will be the preferred functional form for this project. However, there are several ways to introduce fixed factors in this functional form, and one can show that the version used in the fisheries literature is not the best when one is interested in finding optimal levels of fixed factors.
To illustrate the usefulness of the approach derived, and also because the results are of interest in themselves, empirical studies will be undertaken for British, Danish, Icelandic, Norwegian and Swedish fisheries. The regulatory systems in these countries are of interest because the individual quotas have different characteristics. A comparison of the results from the different studies is, therefore, also of interest as it will give information about the extent to which the different systems are successful in harvesting rent. It may also give information about how much fleets have to be reduced to enable collection of most of the rent. How successful the British, Danish, Norwegian and Swedish systems are relative to the Icelandic will also be of interest, since they have systems that have changed the fishermen's incentives without making quotas fully transferable.

Progress to Date
The progress in the first reporting period has been as expected and in line with the schedule in the technical annex. The literature review has been completed and was of sufficient interest to warrant publication. Based on the literature review, we investigated measures of capacity and rent in IVQ fisheries in empirical analysis. A tentative paper was written outlining the basic theory and in which analysis was carried out on Norwegian data.

Results
Datasets for two fisheries in both Iceland and Norway, and one fishery in Denmark, Sweden and the UK were collected. This is the data required for the empirical analysis and covered the first milestone of the project.
A paper was written outlining the basic theory and in which analysis was carried out for Norwegian data. The paper indicated that for the fishery studied, potential resource rent made up more then 50% of landed value, although this rent seemed to be completely dissipated under the current regulatory system.

Classified in FISHERIES AND AQUACULTURE, QUANTITATIVE APPROACHES AND MODELLING

Scientist responsible for the project

Professor FRANK ASCHE
Breiviksveien 40
N-5045 Bergen
Norway - NO

Phone: +47 55959500
Fax: +47 55959439
E-mail: Frank.Asche@snf.no

References

Project ID QLRT-2000-01535
Organisation FOUNDATION FOR RESEARCH IN ECONOMICS AND BUSINESS ADMINISTRATION
Area 5.1.1
Start date 01 January 2002
Duration (months) 30
Total cost 882 898 €
Total EC contribution   664 038 €
Status Completed

The partners

  • STATENS JORDBRUGS- OG FISKERIOEKONOMISKE INSTITUT, Denmark - DK
    HF@SJFI.DK
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