Welfare Effects of Changing Technological Efficency in Regulated Open-Access Fisheries

Abstract

Small-scale fisheries often operate under conditions of regulated open access; that is, the fishery is subject to natural or regulatory constraints on fishing technology, including regulations of fishing gear and fishing practices, but typically there is no direct regulation of catches. We study how an increase in harvesting efficiency changes the different components of welfare—consumer surplus and producer surplus—in such a regulated open-access fishery, taking t the feedback of harvesting on stock dynamics, i.e. the dynamic common-pool resource externality into account. We find that both components of welfare change in the same direction. If, and only if, initial efficiency is low enough so that there is no maximum sustainable yield (MSY) overfishing, an improvement of harvesting efficiency increases welfare.