Did Processing Quota Damage Alaska Red King Crab Harvesters? Empirical Evidence

The Bering Sea and Aleutian Islands (BSAI) red king crab fisheries are managed with a controversial, market-based policy design, in which both individual transferable fishing and processing quotas are used. Despite the fact that the policy design maintains contestable markets, concern remains that the use of individual transferable processing quota (IPQ) damages harvesters who receive individual transferable fishing quota (IFQ). An integer, nonlinear optimization model that incorporates an empirically estimated, non-linear catch per unit effort function is developed to measure imputed IFQ values. The imputed quota values are based solely on harvesting efficiency in the absence of IPQs or potential wealth redistribution between sectors. Results are compared to a prerationalization optimization model and also to empirical quota trading prices in the presence of IPQs. This with and without analysis lends insight into whether and/or the extent to which IPQs damaged BSAI crab harvesters.Crab rationalization, IPQ, IFQ, imputed quota prices, harvesting efficiency., Environmental Economics and Policy, Public Economics, Q22, Q28, D61, C61, L78.,