Efficiency costs of social objectives in tradable permit programs

Kailin Kroetz, James N. Sanchirico, Daniel K. Lew

Research output: Contribution to journalArticlepeer-review

35 Scopus citations

Abstract

Objectives of tradable permit programs are often broader than internalizing an externality and improving economic efficiency. Many programs are designed to accommodate community, cultural, and other nonefficiency goals through restrictions on trading. However, restrictions can decrease economic efficiency gains. We use a policy experiment from the Alaska halibut and sablefish tradable permit program, which includes both restricted and unrestricted permits, to develop one of the few empirical measurements of the costs of meeting nonefficiency goals. We estimate that restrictions are reducing resource rent in the halibut and sablefish fisheries by 25% and 9%, respectively.

Original languageEnglish (US)
Pages (from-to)339-366
Number of pages28
JournalJournal of the Association of Environmental and Resource Economists
Volume2
Issue number3
DOIs
StatePublished - Sep 1 2015
Externally publishedYes

Keywords

  • Alaskan halibut and sablefish fishery
  • Catch shares
  • Created markets
  • Individual transferable quota
  • Tradable permits

ASJC Scopus subject areas

  • Economics and Econometrics
  • Nature and Landscape Conservation
  • Management, Monitoring, Policy and Law

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