Fisheries for multiple species are linked via exposure to environmental shocks as well as the participation patterns of fishers patterns increasingly constrained by exclusionary regulatory measures. Numerous studies have examined fishers short-run supply decisions such as daily participation and location choices. However, medium-term decisions, such as annual permit choices, have attracted little attention. In this paper, we analyze fishers supply decisions in a multispecies context, with a focus on the annual choice of limited entry permits across the entire west coast of the United States.

Our modeling incorporates at least two ways in which portfolios of limited entry permits are distinct from financial assets. First, limited entry permits do not generate dividend flows unless the permit holder (or a lease) the permit. This means that feasible combinations of permits are limited by fishing season, gear, and other regulatory constraints. Second, limited entry permits have an option value. The permit holder does not have to exercise it if the market and/or environmental conditions are unfavorable. These differences are important in specifying our model.

We combine fish ticket and state and federal permit data to examine the relationship between permit portfolios and the resulting landings/revenue. Our dataset includes >16,000 owners over the period 1991 - 2015. The number of limited entry permits increased from four in 1991 to 87 in 2015. The majority of owners have only one permit per year, but many owners possess two or three permits. Salmon and Dungeness crab permits are most common.

Using this dataset, we estimate a discrete choice model to determine how fishermen choose their limited entry permit portfolio. In so doing, we utilize machine learning techniques to obtain the expected revenue and variance of revenue. We also attempt to build a theory of limited entry permit choice, where we highlight the fact that the opportunity cost of holding a permit is the sum of the marginal profits of exercising the permit and the capital gain/loss from price changes.

A growing body of work to evaluate the impact of catch share programs and other fisheries policy interventions relies on treatment effects models, which typically identify the causal net effects of the policy change but not the underlying mechanisms driving those effects. To shed new light on mechanisms, we develop and estimate a structural discrete choice model of individual vessel behavior. This work seeks to improve our understanding of how catch sharesand the policies that they replaceinfluence species targets, timing of fishing activity, and the value generated from the resource. To allow study of inter-species substitutions pre- and post-rationalization, we implement this model using fine-scale commercial fishing data from before and after the start of the Northeast Multispecies Sector Program. We predict stock-specific production at the vessel-day level in first-stage regressions and use these predictions in a second-stage discrete choice model of targeting decisions that controls for weather, costs, and prices. We include non-groundfish species in the choice set to capture outside/non-catch share options and construct separate sub-models of days-at-sea and quota prices. The structural parameters recovered from the second stage are used to simulate the effects of removing days-at-sea regulations and replacing them with catch shares, as well as the effects of out-of-sample policy changes. Ultimately, we will link this model to stock projections under climate change and community vulnerability metrics to compare various economic outcomes under different management configurations and across different sub-sections of the fleet.

The governance of many nation states fisheries has been transformed in recent decadesfrom the tragedies of open access and input regulation to a range of governance structures based upon individual or collective extractive rights. Despite their successes, the role of fisheries managers has not been reduced to merely conducting stock assessments and setting seasonal quotas. Catch shares, especially individual quotas, may leave significant in-season externalities unaddressed, forcing managers to deploy additional management measures to address concerns such as growth overfishing or in-season rent dissipation. This presents a fundamental challenge to fisheries policy modeling in that most economic models used to inform in-season management measures fail to consider the implications of individualized (and often transferable) catch rights within a season. The current range of economic models in fisheries have been specified and calibrated under conditions of regulated open or limited access. As such, these models do not capture the mechanisms by which incentives under catch rights affect fishers in-season behavior, with the result that their predictions could be highly misleading. We develop an empirical spatiotemporal model of fisher behavior in a fishery with tradable catch shares. The key innovation of our approach is the introduction of an annual lease-market for quota, which we model as a pure exchange economy with a rational expectations equilibrium. Fishers are assumed to be forward-looking and form expectations over future quota usage when considering contemporaneous quota supply and demand decisions. Our estimation strategy incorporates both dynamic and general equilibrium elements of catch-share fisheries through a nested fixed-point maximum likelihood procedure. We apply our methodology to the North Pacific multispecies groundfish fishery and evaluate the potential effects of non-rights-based policies, such as area closures and quota reductions. We demonstrate that our approach has superior predictive capabilities than standard models, particularly for out-of-sample predictions of the effects of policies that have not yet been implemented.

Regulators in many countries have adopted individual quotas as a means of dealing with the open access problem inherent in fisheries. The Norwegian Purse Seine fishery has evolved over the last 40 years from an open access fishery to a Rights Based management system with individual vessel catch quotas assigned to all major fish species. Regulations do allow for merging vessel quota. The purpose of this paper is to employ an index approach to decompose vessel revenues and costs by factor components. The index approach can measure the importance of individual prices, vessel size and changes in productivity impacting profitability and provide insight into profit and productivity changes in a mature IVQ fishery. The current study uses a large individual vessel data set for the period 1994-2013. Results show that overtime output prices have been the main drivers associated with increased revenues. We correlate output prices with an evolving IVQ fishery, and changes in harvest and demand conditions. Ongoing capital investment, not offset by increased harvest, has seen productivity decline over the period of study.

This paper explores why salmon harvesters in rural Alaska choose to sell their transferable permits. Constructing an artificial panel from back cast recall survey data collected in nine remote Alaskan villages, I compare the relative importance of covariate shocks to resource markets and individual productivity shocks. I also exploit an arbitrary geographic boundary to examine the role played by additional access to training and credit offered by the local Community Development Quota (CDQ) group. Using a system of equations estimation strategy, I isolate the component of salmon permit price that is exogenously determined by covariate shocks and apply this to the individual decision to supply a permit to market. Owners of higher value drift gillnet permits are more likely to sell their permits when average permit prices are low due to volatility in salmon runs or competition from farmed salmon. This corresponds with evidence that these participants in the capital-intensive sector of the fishery are more likely to be in debt. Conversely, set net permitholders are less likely to be affected by covariate shocks and more likely to liquidate their assets following individual shocks to productivity such as the birth of a child or a divorce. For both types of permitholders, covariate shocks to salmon runs and prices are more important predictors of sale than individual productivity within the fishery. Risk preferences and the credit, grants, and training provided to residents within the CDQ boundary appear to have minimal impact on the decision to sell access rights.