Markets and Rent Dissipation under Regulated Open Access
By James E. Wilen and Frances Homans
ABSTRACT
Most of the world's fisheries operate under some form of regulated open access. Under regulated open access, entry is open but harvesters must adhere to certain restrictions on behavior ranging from gear restrictions to area and seasonal closures. By far the most commonly used auxiliary regulation is season closures. Although most fisheries economists focus on capital stuffing and other input increasing effects of open access, few have looked at the impacts of imperfect property rights on the market. This is an important omission, because most regulated open access fisheries have also had dramatic impacts on their markets. For example, on the West Coast, halibut, sablefish, and crab all have compressed seasons under regulated open access, necessitating most of the product being converted into processed (frozen, canned) rather than fresh products. This paper develops a model of regulated open access that includes rent dissipation in the market as well as the cost side. The model shows how regulated open access fisheries get backed into short seasons as a result of market effects. In addition, it shows how, when such fisheries are rationalized, rents in the marketing sector are generated by reversing the process of product market distortion. Using an example calibrated to the halibut fishery, we show that market-side rent losses under regulated open access can be as large as capital stuffing and other traditionally identified excess input sources.
KEYWORDS: fisheries, rents, markets, rent dissipation
 View Seafood Markets and Fishery Management: Conceptual and Empirical Issues Session
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