Gains from quota trade: theoretical models and an application to the Danish fishery

Research output: Contribution to journalJournal articleResearchpeer-review

We provide a framework for evaluating potential effects of introducing tradable quotas to a sector. The effects depend on the economies of scale and scope of the production technology, and on firms' ability and willingness to learn best practice methods (catching up) and to change their input and output composition (mix). To illustrate our approach, data from the Danish fishery are used to calculate the potential gains from introducing individually transferable fishing quotas. Data envelopment analysis is used to model the production technology. We find that pure reallocation is as important as pure learning, i.e. quota reallocation without catching-up is as valuable as learning best practice with fixed allocations.
Original languageEnglish
JournalEuropean Review of Agricultural Economics
Issue number1
Pages (from-to)105-127
Number of pages23
Publication statusPublished - 2007

    Research areas

  • Former LIFE faculty - data envelopment analysis, idividual transferable quotas, reallocation, technical efficiency, allocative effeciency, fishery

ID: 8075856