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Title: The social cost of fishery subsidy reforms
Authors: Da-Rocha, Jose-Maria; Garcia-Cutrin, Javier; Prellezo, Raul; Sempere, Jaume
Citation: MARINE POLICY, 2017, 83, 236-242
Abstract: This paper analyzes the impact of reducing fisheries subsidies in a general equilibrium model for a fishery with heterogeneous vessels. It considers the impact of the stock effect, which determines the participation of vessels in a likely increased stock abundance. In equilibrium, the productivity of the fleet is endogenous as it depends on the stock of fish along the equilibrium path. The model concludes that any impact of a subsidy drop will depend on the stock effect. If that effect is large, fishing firms will benefit from the stock recovery and the elimination of the subsidy will increase future returns on investment. The model is particularised to industrial shrimp fisheries in Mexico. It is shown that the complete elimination of a subsidy increases biomass, capitalisation, marginal productivity, and consumption and reduces inequality when the effect of the induced increase in the stock is considered. However, if that effect is not considered, capital and consumption decrease, and inequality and hence, the social costs of a subsidy drop, increase.
Keywords: Subsidies; General equilibrium model; Fisheries; Social costs; NORTH-ATLANTIC; ECONOMICS; SUSTAINABILITY; INVESTMENT; MANAGEMENT; POLICY
Issue Date: 2017
Type: Article
Language: English
DOI: 10.1016/j.marpol.2017.06.013
ISSN: 0308-597X
E-ISSN: 1872-9460
Funder: European Commission (MINOUW) [H2020-SFS-2014-2, 634495]
Spanish Ministry of Economy and Competitiveness [ECO2016-78819-R]
Xunta de Galicia [GRC 2015/014]
Basque Government project MULTIPLAN project of the Department of Economic Development and Infrastructures of the Basque Government
Appears in Publication types:Artículos científicos

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