Economic Effects of Multispecies Catch Share Management

Abstract

Catch share management is a common and increasingly relied upon form of fisheries management in which, frequently, shares of a hard total allowable catch are allocated to individuals or groups of harvesters. A style of rights-based-management, catch shares are often thought to promote efficient resource use and long-term stewardship, improving both economic and ecological conditions within the fishery. Their success in multispecies fisheries, where non-selective gear captures several, separately managed stocks, has been the subject of ongoing debate however. Limited flexibility in production might dampen or entirely remove any and all of catch shares' potential benefits as harvesters are unable to effectively target or avoid individual stocks. In this dissertation, I explore the economic effects of multispecies catch shares following a 2010 application to New England groundfish, a diverse and overexploited multispecies fishery. In the first chapter, I combine market models of ex-vessel inverse demand and counterfactual models of individual harvesting behavior to estimate the market timing benefits of catch share management. I find that fleet revenues were improved by over US $30 million and that individual benefits were heterogeneously distributed, with large and more diverse operations better able to take advantage of market externalities. In the second chapter, I theoretically develop and empirically explore a model of costly avoidance wherein production of target stocks is given up to reduce that of the avoided. An error in the management of pollock, initially setting a low and constraining allocation that was later relaxed, is used to identify behavioral response to multispecies production constraint, finding harvesters engaged in costly avoidance strategy, which had the low pollock allocation persisted, would have cost the fleet US $3 million. I then develop a neoclassical multispecies production technology in the third chapter which is used to test technological restrictions of strong disposability on pairs of demersal species and also estimate the costs, in terms of forgone production, of pollock avoidance. For catch share regulated species, strong disposability is rejected more than half the time, suggesting output controls may frequently lead to choked production. Additionally, pollock avoidance costs are estimated at US $6 million.