Productivity studies in response to regulatory reform
There have been a number of productivity studies that occurred
after specific fisheries transitioned to output based management
measures that adopt rights based fishing methods, such as individual
transferable quotas (ITQs). This is because economic
theory generally suggests that after adopting rights based systems
with transferable quotas, there should be gains in productivity by
the fleet that remains, as low productivity vessels exit. The remaining
vessels will purchase quota from vessels which leave and
increase their output levels. They also have further incentive to
292 J. Walden et al. / Marine Policy 62 (2015) 289–293
make changes in their input usage and become more efficient.
However, there are still externalities which exist in these systems,
and overall output is limited by the Government [10]. Researchers
are interested in determining whether there were productivity
changes post-ITQ, along with changes in output prices and fleet
composition.
The evidence for improved productivity change seems mixed. A
study of the British Columbia halibut fishery showed that the
greatest benefit associated with a shift to individual harvesting
rights was an increase in output prices, rather than productivity
gains [25]. In this study, the authors used a Törnqvist index to
measure productivity change as part of a fully decomposed profitability
index which included price, productivity and capacity
utilization indices. By fully decomposing a profitability index, it is
possible to determine whether productivity changes or price
changes were the largest influence behind profitability change. For
this fishery, the authors found that profitability of the vessels postITQ
was influenced more by improved price attributable to a
longer fishing season rather than to productivity change. The importance
of price changes post-ITQ, rather than productivity
change, was also found in the Nova Scotian mobile gear fishery
[33], which used the same profit index decomposition. A third
study using this method found productivity gains and increased
output prices in the southeast Australian trawl fishery after combining
a vessel buyback scheme with quota trading [34].
In a study of the first U.S. ITQ system, it was found that vessel
owners behaved strategically pre-ITQ in order to gain quota share,
and increased their productivity. Post-ITQ productivity increased
as less productive vessels exited the fishery [35]. The strategic
behavior of vessel owners in order to gain more quota share was
thought to be the major reason for productivity gains. This has
interesting implications as the policy instrument was influencing
productivity before the policy took place. A more recent study of
the same fishery showed that those productivity gains were not
sustained in later years [10]. This latest study was a fully decomposed
Malmquist index, and showed that although overall productivity
declined, technical change increased post-ITQ rapidly,
and did not decline in subsequent years. The authors point out
that an ITQ is not a complete property right, and additional restrictions
placed on vessels post-ITQ may limit productivity gains.