The Efficiency Costs of Transfer and Consolidation Constraints: Evidence from a Resource Market

Property rights-based management is widely used to improve efficiency in natural resource sectors such as fisheries. In catch share programs, harvesting rights are allocated to individuals or firms and traded in markets, with prices reflecting both economic outlooks and regulatory constraints. To address equity and social concerns, many programs impose restrictions on transferability, such as limits on consolidation, geographic trade, or harvesting technology, which reduce efficiency. Although such tradeoffs between efficiency and social objectives are common, there is limited empirical evidence on how these constraints affect quota valuation, which are often not publicly observable. We analyze how transferability restrictions affect quota values in a large Norwegian catch-share fishery. Using a novel dataset linking all vessel and quota transactions from 2009 to 2017, we estimate a hedonic pricing model that recovers the capitalized value of quota rights embedded in fishing-bundle transactions. This allows us to quantify the equity–efficiency tradeoff associated with Norway’s coastal cod quota policy. In particular, we find large and systematic differences in marginal quota values across regulatory groups, where quotas associated with tighter consolidation caps have substantially lower marginal valuations. Geographic restrictions also affect markets, though their effects are modest relative to the impact of consolidation caps.