Kim, Hwa Nyeon (2003-05). Transferable rights in a recreational fishery: an application to the red snapper fishery in the Gulf of Mexico. Doctoral Dissertation. | Thesis individual record

Overfishing of red snapper in the Gulf of Mexico has significantly increased
lately. A major regulation to reduce the overfishing is Total Allowable Catches (TAC) in
combination with a season closure. The restrictions on entry lead to an inefficient
outcome, however, because the resource is not used by the fishermen who value it the
most. As an alternative to restricting entry, transferable rights (TR) programs are being
increasingly considered. Under a TR program, a market is created to trade a right to use
a resource and the total benefits of the participants are maximized through such a trade.
The principal objective of this dissertation is to comprehensively assess
economic and biological consequences of the red snapper fishery for the TR program.
To date the literature lacks sufficient discussion of how recreational TR programs would
function. I, therefore, propose an economically desirable institutional framework for the
TR program in the recreational fishery. I draw some lessons from hunting programs and
applications of other TR programs to find better schemes for the TR program in the
recreational fishery.This dissertation uses theoretical and empirical models as well as institutional
settings to develop the TR program. A theoretical model is provided to investigate which
unit of measurement for the TRs is preferable. For empirical models I first estimate an
empirically based recreation demand that incorporates TR permit demand and then
develop a simulation submodel using the estimated demand. I find price instruments,
such as fees or TR programs, are very efficient to reduce fishing trips but they also lead
to distributional impacts on trips by low income (or low cost) anglers. Partial simulation
results indicate that an efficiency benefit of the TR program would be significant
because recreational trip demand in the current closed season is not trivial.
I conclude that the TR program in the recreational fishery will economically and
biologically provide a great deal of merit to reduce the overfishing situation and a
substantial efficiency gain to Gulf anglers. Some institutional barriers, especially from
the large transaction cost can also be overcome if electronic systems or the Internet are

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