Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/204336 
Year of Publication: 
2012
Series/Report no.: 
FOI Working Paper No. 2012/3
Publisher: 
University of Copenhagen, Department of Food and Resource Economics (IFRO), Copenhagen
Abstract: 
Renewable natural resources (like water, fish and wildlife stocks, forests and grazing lands) are critical for the livelihood of millions of people and understanding how they can be managed efficiently is an important economic problem. I show how regulator uncertainty about different economic and ecological parts of the harvesting system affect the optimal choice of instrument for regulating harvesters. I bring prior results into a unified framework and add to these by showing that: 1) quotas are preferred under ecological uncertainty if there are substantial diseconomies of scale in harvesting, 2) that a pro-quota result under uncertainty about prices and marginal costs is unlikely, requiring that the resource growth function is highly concave locally around the optimum and, 3) that quotas are always preferred if uncertainly about underlying structural economic parameters dominates. These results showing that quotas are preferred in a number of situations qualify the pro fee message dominating prior studies.
Subjects: 
Prices vs. quantities
renewable resource regulation
JEL: 
H23
Q2
Document Type: 
Working Paper

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