Economic Evaluation of Tradable Property Rights
- Author(s): Brandt, Sylvia
- Hanemann, Michael
- et al.
Economists have for decades advocated transferable property rights, in which the total annual allowable catch is divided into shares, which are then tradable, as a market mechanism to decrease overcapacity. Tradable property rights, or individual transferable quotas (ITQs), are a significant departure from command-and-control regulations that impose combinations of gear restrictions, season limitations, license limitations and trip limits. While in theory tradable property rights have clear economic advantages over command and control, Federal fisheries managers face the challenge of evaluating and ranking regulatory options in a world of complexity and uncertainty.
The goal of this project is to describe the changes in the composition of the Mid-Atlantic surf clam fishery, which has been regulated with first command and control and then tradable property rights. The data analysis indicates that while there were changes in the structure of the clam industry, the introduction of tradable property rights did not lead to a redistribution of welfare across different types of participants in the industry.