Efficiency Costs of Restrictions in Tradable Permit Programs: Analysis of the Alaskan Halibut and Sablefish Individual Fishing Quota System

Project Number
E/MRE-7
Project Date Range
-
Focus Area(s)
Resilient Coastal Communities and Economies, Sustainable Fisheries and Aquaculture

The Alaskan halibut and sablefish fishery is currently managed under a “catch-shares” program, known as an individual transferable quota (ITQ). Loosely speaking, ITQs grant quota holders “rights” to catch a certain amount of fish and to buy and sell quota, much as stocks are traded. To meet certain social goals, however, ITQs are not purely free-market-based and are often established with restrictions on who can trade with whom and own quota. With the halibut/sablefish fishery, for example, smaller vessels must maintain a certain amount of the total quota, and there are limits to corporate ownership and consolidation. Though these rules keep more boats on the water, they also decrease the fishery’s economic efficiency. The goal of this project is to develop a model that can quantify the costs of these inefficiencies for the halibut and other ITQ fisheries. In the project’s first year, a preliminary model was developed and is now being fine-tuned. Results from this project are relevant to fishery managers and can be used to inform the design of new catch-shares programs.