Capacity Reduction, Quota Trading and Productivity: The Case of a Fishery

18 Pages Posted: 3 Jul 2006

See all articles by Kevin J. Fox

Kevin J. Fox

UNSW Australia Business School, School of Economics

Quentin Grafton

The Australian National University

Tom Kompas

University of Melbourne

Tuong Nhu Che

Government of the Commonwealth of Australia - Australian Bureau of Agricultural and Resource Economics (ABARE)

Abstract

We present the first ex post study that quantitatively analyses the effects of a licence buy-back and enhanced quota trading on the profitability and productivity of individual vessels in a fishery. Using firm-level data and a profit index decomposition method, we find that small and large vessels and three different trawler fleets all experienced substantial productivity gains in the year immediately following a licence buy-back and the establishment of a quota brokerage service. The apparent ongoing benefits of the buy-back and increased quota trading over the sample period are in stark contrast to the generally unfavourable long-term outcomes commonly associated with vessel buy-backs in input-controlled fisheries.

Suggested Citation

Fox, Kevin J. and Grafton, Quentin and Kompas, Tom and Che, Tuong Nhu, Capacity Reduction, Quota Trading and Productivity: The Case of a Fishery. Australian Journal of Agricultural and Resource Economics, Vol. 50, No. 2, pp. 189-206, June 2006, Available at SSRN: https://ssrn.com/abstract=913487 or http://dx.doi.org/10.1111/j.1467-8489.2006.00331.x

Kevin J. Fox (Contact Author)

UNSW Australia Business School, School of Economics ( email )

High Street
Sydney, NSW 2052
Australia
(02)9385-3320 (Phone)
(02)9313-6337 (Fax)

Quentin Grafton

The Australian National University ( email )

Crawford School (Bldg 132)
The ANU
Acton, Canberra, Australian Capital Territory 2601
Australia

HOME PAGE: http://https://crawford.anu.edu.au/people/academic/quentin-grafton

Tom Kompas

University of Melbourne ( email )

Parkville, Victoria
Melbourne, Victoria 3010
Australia

Tuong Nhu Che

Government of the Commonwealth of Australia - Australian Bureau of Agricultural and Resource Economics (ABARE) ( email )

Canberra
Australia

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