The distributional outcomes of rights-based management in fisheries

Abstract

Fisheries managers have increasingly adopted rights-based management (i.e., “catch shares” or “individual transferable quotas” [ITQs]) to address economic and biological management challenges under prior governance regimes. Despite their ability to resolve some of the symptoms of the tragedy of the commons and improve economic efficiency, catch shares remain controversial for their potentially disruptive social effects. One criticism is that the benefits of rights-based reforms are unequally distributed across vessels and between fishery participants (e.g., crew and hired captains) and that stakeholders that do not receive an allocation of harvest rights may see their remuneration decrease. Yet, empirically assessing these claims is difficult in almost all ITQs due to poor availability of longitudinal cost, earnings, and employment data. This paper evaluates these claims using vessel-level data to characterize impacts of a long-established ITQ program for Alaskan crab fisheries on the level and distribution of payments to claimant groups. We find that the share of vessel proceeds accruing to captains, crew, and vessel owners declined under the catch-share regime to make room for new payments to quota owners. Average daily payments to captains, crew, and vessel owners declined, albeit slightly, yet retained their pre-ITQ premia relative to compensation in other sectors. However, inequality in payments to workers and vessel owners declined after ITQs, as did the interseasonal volatility in compensation to workers, a measure of financial risk. Finally, we find that consolidation-induced increases in leasing costs have had little effect on workers’ remuneration, but have reduced returns to vessel ownership.