Market effects of catch share management: the case of New England multispecies groundfish

Abstract

Abstract In 2010, management of New England multispecies groundfish transitioned from input restrictions on harvester effort to collective rights-based management. Faced with a large reduction in harvesting days, 432 active vessels, representing 98% of historical landings, joined one of the 17 sectors allocated catch shares. The incentives presented under sector management, combined with regulations of several separately managed, revenue-important species, led to changes in harvest strategies and the timing of landings for both multispecies groundfish and many other species targeted by the sector vessels. Temporally modified landings altered the exvessel market mix of a range of species throughout the fishing year, significantly affecting prices received as well as annual harvester revenues. Two counterfactual individual harvester landings' timing scenarios for 25 species are combined with independent fixed effects models of inverse dealer demand in estimating the revenue effects of catch shares during their first year. Aggregate gains of over $30 000 000 were found to result from advantageous market timing changes brought on by more flexible catch share management.