Quota Trading and Profitability: Theoretical Models and Applications to Danish Fisheries

Using Data Envelopment Analysis (DEA), we provide a framework to analyze the potential gains from quota trading. We compare the industry profit and structure before and after a free trade reallocation of production quotas. The effects of tradable production quotas depend on several technological and behavioral characteristics, including the ability to learn best practice (catch-up) and the ability to change the input and output composition (mix). To illustrate the usefulness of our approach, we analyze a dataset from the Danish fishery. We study the industry profit and structure under each of four sets of technological and behavioral characteristics.


Subject(s):
Issue Date:
2003
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/24180
Total Pages:
37
JEL Codes:
C61; L51; Q22; Q28
Series Statement:
Unit of Economics Working Paper 2003/2




 Record created 2017-04-01, last modified 2017-08-24

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