A Simulation Model of License Buyback in the Texas Bay Shrimp Fishery

Abstract

The effect of a license limitation and buyback program implemented for the Texas bay shrimp fishery on effort, rents, license price, and consumer and producer surplus is simulated. Results indicate the original program will not reduce effort and increase rents until year 16 of the program. To decrease the time necessary to reduce effort, additional funds to buy back licenses are needed. Results indicate that if an additional $500,000 per year were available at the beginning of the program to buy licenses, positive rents would have started in the third year of the program. Increased funds available to the program would have also resulted in the largest impact on consumer and producer surplus changes. Although the present value of changes is positive for producer and consumer surplus, producers clearly gain more than consumers.