Market Share, Capacity Utilization, Resource Conservation, and Tradable Quotas

Abstract

This paper examines the impact of the introduction of Individual Transferable Quotas (ITQs) on catch, market share, and capacity utilization of firms in the Mid Atlantic Surf Clam and Ocean Quahog (SCOQ) Fishery. Via the production function framework, catch and market share regression models are utilized in examining the effects of operator size, vessel age, and alternative product catch variables on industrial structure and how such effects changed after ITQs were introduced. Results indicate that in both fisheries, the ITQ system enhanced the value of each vessel by allowing vessel owners to apply greater effort to fewer boats, thus reducing excess capacity in the fishery. Results also indicate an overall resource conservation effect of ITQ introduction in the surf clam fishery. These results suggest that in the presence of ITQs, overall efficiency was enhanced in the SCOQ fishery.