Do Catch Shares Increase Prices? Evidence from US Fisheries

Abstract

Rights-based management of fishery resources theoretically allows firms to minimize the cost of extraction without the threat that other harvesters will take their allocations, but added flexibility also allows firms to exploit revenue margins such that firms balance potential revenue gains with potential cost savings. Using two approaches, difference-in-differences with an index of seafood prices and synthetic control, we test for revenue gains in 39 US fisheries that adopted market-based regulations and find mixed evidence of price increases. Species with price increases tend to have viable fresh markets or other features that discourage gluts, whereas species with price decreases plausibly have more to gain on the cost side or are part of a multispecies complex with a higher-value species experiencing a price increase.