We introduce a modified version of the Gordon-Schaefer (GS) fishery model that neatly describes different sources of inefficiency in limited entry fisheries. In our modified model, each vessel chooses the number of fishing days as well as the rest of the inputs, where the choice of the latter determines its catchability coefficient. Consequently, our model explicitly isolates two sources of fishery inefficiency: (i) excess vessel days (vessels operate for more than the optimal number of days); and (ii) capital stuffing (vessels spend more than optimal on increasing their catchability coefficient). Our model predicts that when vessels cannot choose the number of fishing days as they like, both of the two sources of inefficiency become relevant in assessing the policy effects. We find that, in fisheries with fish stocks below maximum-sustainable-yield levels, introducing restrictions on fishing days or day-based access fees can increase harvest, fish stocks and total rents.
|Name||Economics Discussion Papers|