In this project we will investigate how fishermen's behaviour can be modelled under new regulatory regimes where the individual vessel's output is regulated by a quota. The key insight is that with a quota on output, a cost function specification is preferable to the traditionally used profit function. We will also show how one can derive a number of interesting measures from a cost function, including measures of actual resource rent harvested, the maximal resource rent, the optimal vessel size, the optimal fleet size, etc. The usefulness of the approach is shown in applications to Danish, Icelandic, Norwegian and Swedish fisheries, where different versions of individual vessel quota fisheries are in operation. This will also allow a comparison of these regulatory systems with respect to several economic elements of fisheries management.
The main objective in this project is to provide models for empirical specification of fishermen's behaviour under regulatory systems based on Individual Vessel Quotas (IVQ). This is important because the fishermen's incentives under these management systems are substantially different from what they are under traditional management systems. In particular, under these systems, quantity landed is not a variable choice for the fishermen. A cost function rather than a profit function approach should therefore be used. However, a number of means for measuring fishermen's behaviour have been developed in relation to profit functions. We will derive similar measures in a cost function context. The approach will be used empirically to analyse and compare Danish, Icelandic, Norwegian and Swedish fisheries where IVQ, both transferable and nontransferable, have been implemented.
FOUNDATION FOR RESEARCH IN ECONOMICS AND BUSINESS
STATENS JORDBRUGS- OG FISKERIOEKONOMISKE INSTITUT
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UNIVERSITY COLLEGE OF AKUREYRI
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