Quota consolidation in Norwegian coastal fisheries

Balancing the trade-off between economic efficiency and social objectives has been a challenge for fisheries managers under rights-based management. While the actual prioritization should be guided by social preferences, the mechanisms and consequences of the quota transfer system need to be well understood. We investigate the effects of several quota transfer schemes implemented in the Norwegian coastal cod fishery during the 2000s. This is a small-scale fishery that has traditionally been important for employment in the northern part of Norway. Using vessel-level quota registry data, we estimate the effect of quota-trading and changes in quota distribution on vessel exit using a difference-in-differences approach that exploits variation in implementation timing between regulatory groups. In addition, we describe the outcome of quota consolidation with descriptive statistics. Our results confirm that quota trade triggers exit of vessels from the fishery. In addition, we quantify the consolidation in terms of catch per vessel and geographic distribution of quotas and landings. While the policy change has the expected effects in the short run, our results suggest that the implications of consolidation last longer. This has implications for policymakers trying to balance economic efficiency and social objectives of rational fishery management.