Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/204411
Authors: 
Jensen, Frank
Hansen, Lars Gårn
Year of Publication: 
2017
Series/Report no.: 
IFRO Working Paper 2017/07
Abstract: 
Theoretical papers find that taxes are preferred over individual transferable quotas (ITQs) when fisheries regulators are uncertain about either biological growth or the extent of non-compliance with regulations. However, the size of the welfare gain from switching to taxes has not previously been investigated empirically. Based on estimated profit and growth functions, we simulate this gain for the Danish cod fishery in the Kattegat and find a welfare gain of less than 2%. We also develop a simple indicator which can be used to approximate the welfare gain of switching to tax regulation for other fisheries. The value of the indicator is calculated for a number of fisheries worldwide for which the necessary data have been published and we find that the gain from a switch to taxes is typically between 1.5% and 2.5% (in no case greater than 4.2%). We, therefore, conclude that the switch to tax regulation of fisheries, which has been recommended in prior theoretical literature, is of little practical importance.
Subjects: 
taxes
ITQs
uncertainty
cod in Kattegat
actual welfare gain
JEL: 
Q22
C54
D62
H23
Q28
Document Type: 
Working Paper

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