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Title:Privatizing renewable resources: Who gains, who loses? PDF Logo
Authors:Stoeven, Max T.
Quaas, Martin F.
Issue Date:2012
Series/Report no.:Economics working paper / Christian-Albrechts-Universität Kiel, Department of Economics 2012-02
Abstract:Renewable resources can provide society with (i) resource rent, (ii) consumer surplus and (iii) worker surplus in resource harvesting. In a dynamic analysis we show that privatization increases the present values of consumer surplus and worker surplus if harvesting costs do not depend on the resource stock. If they do, consumers and workers tend to lose from privatization and indeed prefer open-access if the discount rate is sufficiently high. Applying the analysis to the North-east Arctic Cod fishery, we find that socially efficient privatization would increase the present value of resource rent by 1.1 billion USD, while the present value of consumer surplus would decrease by 0.4 billion USD. These diverging interests may explain why rent dissipation often persists even if use rights could be defined and enforced.
Subjects:resource rent
consumer surplus
worker surplus
distribution
political economy
JEL:D33
D72
Q21
Q28
Document Type:Working Paper
Appears in Collections:Economics Working Papers, Department of Economics, CAU Kiel

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