Managing Renewable ResourcesSlides [link]
Managing renewable resources - Theory
- KO chapter 7 - pp 128-138.
- Listen to Planet Money “A less deadly catch”
- Figure 7.5 describes the maximum sustainable yield. Is this point economically efficient? Why or why not?
- When quotas were initially imposed, Halibut fishing in Alaska became more deadly. Why did assigning individual property rights make the fishery safer?
- Watch this CSF video on Individual and Transferable Quotas.
- A model of the economics of a fishery is provided. This model is useful for understanding the basic economics of many renewable resources.
- Understand the economically efficient rate of harvest. It often differs from the maximum sustainable rate.
- Under free entry, fishermen will enter until net benefits are zero.
- Regulation can be used to achieve the efficient outcome.
- Example from US halibut fishing