RT Journal Article
SR Electronic
T1 Unraveling the Multiple Margins of Rent Generation from Individual Transferable Quotas
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 538
OP 559
DO 10.3368/le.90.3.538
VO 90
IS 3
A1 Matthew N. Reimer
A1 Joshua K. Abbott
A1 James E. Wilen
YR 2014
UL http://le.uwpress.org/content/90/3/538.abstract
AB Individual transferable quotas (ITQs) induce changes along both the extensive margin—via consolidation of quota among fewer vessels—and the intensive margin, as harvesters adjust their behavior to ITQ incentives. We use ITQ introduction in the Bering Sea crab fishery to decompose the sources of rent generation across both margins. We embed an empirically calibrated structural model of the harvesting process into a sector-level model, allowing us to experimentally “unravel” the ITQ treatment. We show that the magnitude and source of rent generation under ITQs critically depends on the manner and degree of rent dissipation before ITQs are implemented. (JEL Q22, Q28)