Economic drivers. Input and output prices Adjustment under ITQs

Transcription

1 Ecoomc drvers Iput ad output prces Adjustmet uder ITQs

2 Outle Questo beg examed How are fshers lely to adjust ther fshg operatos uder ITQs? Methodologes to loo at the ssue Cost fuctos Proft fuctos Case study Norther praw fshery

3 Adjustmet uder ITQs Icetves uder ITQs dfferet to ope access Race to fsh provdes cetves for larger, more powerful vessels order to crease share of the output Removg ITQs allows fshers to Adjust quota holdg ad effort levels to maxmse profts for a gve vessel the short term, ad Chage ther vessels order to maxmse profts the loger term The drecto of chage wll deped o a umber of factors Output prces ad expectatos of output prces Iput prces ad expectatos of put prces Avalablty of quota

4 Methods to loo at these $ Cost fuctos Ca be used to estmate the cost mmsg level of catch Taes to accout costs of producto, but ot the prces for the outputs $ Reveue Average cost Costs Proft Output Cost mmsg level of output Iputs Proft fuctos Taes to accout both put ad output prces Derve optmal put use ad output levels

5 Cost fucto estmato Traslog cost fucto LC = β o α l w αj l w l wj β y l y β yy(l y) βy l w l y Share equatos S Homogeety codtos 1 = α l w α l w β l Q ε j j = 1, α j = 0, ad y = α β j j Solve usg restrcted SUR Mmum costs whe returs to scale =1 RTS = 1/( C / Y ) = 1/( β y β yy ly β y l w ) q 0 1 ε

6 Proft fucto approach,,, Geeral form lπ = α β l Z γ t γ t Share equatos γ l Pt Homogeety codtos S t 0 tt α l P l l 1 j l j β l Z α l P l P j l Z γ l Z l t j β l α l Z P = α α l P α j l Pj β l Z γ t j α = 1 α = 0 β = 0 γ = 0 j β l P l Z Estmate usg restrcted SUR S = PQ / π Q = πs / P

7 Norther praw fshery example $18 Declg praw prces $40 Edeavour ad baaa praw prces ($/g) $17 $16 $15 $14 $13 $1 $11 $10 $9 Baaa Edeavour Tger $35 $30 $5 $0 $15 $10 $5 Tger praw prces ($/g) $8 $ Year Icreasg fuel prces Pla to move to ITQs 010. Icetves to adjust catches, effort levels ad vessel sze to maxmse profts Fuel costs % of total cash costs Fuel prce $/l Year Fuel costs as a proporto of total cash costs % Offroad desel prce $/l

8 Optmal put use ad catches Ege power Fuel use (a) (b) Relatve ege power (W) Relatve fuel prce Relatve fuel use Relatve praw prces 0.0 Relatve fuel prce Relatve praw prces Baaa praw catch Tger praw catch (c) (d) Relatve baaa praw catches Relatve fuel prce 1.9 Relatve tger group catches Relatve praw prces Relatve fuel prce Relatve praw prces

9 Key assumptos ad ma pots of results Key assumptos Tger praw stocs 7% hgher at MEY; baaa praw stocs average Restrctos o headrope legth removed (creases t oly 4% above average) Key results Larger (tha curret average) boats oly more proftable wth low fuel costs or hgh praw prces For all prce combatos, t s worth reducg fshg effort Optmal baaa praw catch s more sestve to fuel prces tha praw prces Optmal tger praw catch more sestve to praw prces Wth hgh fuel prces ad average praw prces A proft maxmsg fleet s lely to cosst of smaller vessels that dvdually fsh less, tae fewer baaa praws ad slghtly fewer tger praws

10 Summary Assumptos of proft maxmsg behavour allows us to predct how fshers may behave lght of chagg ecoomc codtos. Ths s oly lely to be vald uder codtos of ITQs Uder regulated ope access the cetves are altered substatally Both proft ad cost fuctos ca be used to provde a gude as to how the fleet may loo uder future boecoomc codtos