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Overcapacity in Gulf of Mexico reef fish IFQ fisheries: 12 years after the adoption of IFQs

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Abstract

We study the impacts of individual fishing quota programs on overcapacity and the technical efficiency of the Gulf of Mexico red snapper and grouper-tilefish fisheries. We deploy generalized panel data stochastic frontier methods, which allow us to decompose time invariant heterogeneity into both vessel specific heterogeneity and persistent inefficiency. This type of decomposition has recently seen interest in a variety of applied production settings but marks the first use in fishery studies. Our main findings show that roughly 20% of red snapper fleet size could have harvested the entire red snapper quota and that the time-varying technical efficiency of the red snapper fleet grew by 6% post-IFQ. We also find that 57% of the Gulf reef fish IFQ fishery (red snapper combined with grouper-tilefish), had it operated at full efficiency, could have harvested the quota in the early stages of the IFQ program (2011–2016), and that the time-varying technical efficiency of the fleet rose by 5% post-IFQ. “The views and opinions provided or implied in this manuscript are those of the authors and do not necessarily reflect the positions or policies of NOAA”.

“The views and opinions provided or implied in this manuscript are those of the authors and do not necessarily reflect the positions or policies of NOAA”.

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Notes

  1. (Solís et al. 2015a) provide an overview of empirical studies examining capacity in fisheries.

  2. Earlier work studying excess capacity include (Pascoe and Coglan 2000; Felthoven 2002; Felthoven et al. 2009) and (Horrace and Schnier 2010).

  3. Detailed accounts of the management history of the red snapper fishery can be found in Waters (2001), Hood et al. (2007), Agar et al. (2014), and SERO (2019b).

  4. For reference, there were a total of 114,685 complete observations that reported red snapper landings regardless of fishing gear so limiting our analysis to vertical line covers roughly 82% of the trips where red snapper was caught.

  5. Certainly this empirical practice, while common in many applied production domains, is tenuous at best, but lacking a formal selection model, the other option is to focus our attention exclusively on those landings that reported red snapper. In this case we have 63,260 trip records, roughly two-thirds of our initial sample.

  6. This is a common issue in empirical work that typically results in researchers seeking alternative specifications to have the ability to present estimates on inefficiency. Another alternative is to use bootstrap bagging methods to construct confidence intervals for each vessel in each period.

  7. An alternative way to think about capacity would be the use of the vessels pre- and post-IFQ. This is an interesting extension which we leave for future research.

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Authors and Affiliations

  1. NOAA, Miami, USA

    Juan Agar

  2. Department of Economics, Syracuse University, Syracuse, USA

    William C. Horrace

  3. Department of Economics, University of Miami, Miami, USA

    Christopher F. Parmeter

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  1. Juan Agar
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  2. William C. Horrace
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  3. Christopher F. Parmeter
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Correspondence to Christopher F. Parmeter.

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This paper was previously circulated under the title “Fleet Capacity Dynamics in the Gulf of Mexico Red Snapper Fishery: 12 years after the IFQ”.

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Agar, J., Horrace, W.C. & Parmeter, C.F. Overcapacity in Gulf of Mexico reef fish IFQ fisheries: 12 years after the adoption of IFQs. Environ Resource Econ 82, 483–506 (2022). https://doi.org/10.1007/s10640-022-00687-w

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