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Intertemporal quota arbitrage in multispecies fisheries
- Source :
- Journal of Environmental Economics and Management. 93:185-207
- Publication Year :
- 2019
- Publisher :
- Elsevier BV, 2019.
-
Abstract
- In the management of natural resources, regulation often induces behavioral responses by resource users that ultimately undermine stated policy objectives. Examples of these unintended consequences have been associated with regulations ranging from the Endangered Species Act to laws governing clean air. In this paper we investigate an unintended behavioral response that can be triggered by conservation measures in multispecies fishery management, which leads to increased targeting of the species the conservation measures are meant to protect. Harvest is subject to stochastic variation, with output partially determined by the probability of encountering species of interest, either due to targeting or avoidance. Given the right conditions, an intertemporal arbitrage opportunity arises due to the fact that by targeting a stock in the current period, the probability of encountering that stock in the next period, when announced conservation measures are implemented, decreases. We present an empirical case study that supports the findings of the theoretical model. The results indicate that, by targeting so called weak stocks, some New England fishermen are willing to trade off increased costs today for increased expected profits in the future. To prevent the potentially harmful effects of this behavioral response, a manager may adopt precautionary provisions at the time a quota reduction is announced, or alternatively allow the industry to bank part of its current season's quota in order to alleviate the consequences of the reduction in the ensuing period. These results highlight the challenge of developing effective conservation strategies.
- Subjects :
- Economics and Econometrics
Unintended consequences
Natural resource economics
05 social sciences
Endangered species
Management, Monitoring, Policy and Law
Trade-off
Natural resource
Behavioral response
0502 economics and business
Economics
050202 agricultural economics & policy
Arbitrage
Fisheries management
050207 economics
Stock (geology)
Subjects
Details
- ISSN :
- 00950696
- Volume :
- 93
- Database :
- OpenAIRE
- Journal :
- Journal of Environmental Economics and Management
- Accession number :
- edsair.doi...........40cd69c9108d80afb9d8651c523a38ce