Boris Vallée, Harvard Business School

"One Fish, Two Fish: Market Design for Environmental Sustainability"

Abstract

We study how the design of contractual rights to exploit natural resources affects biodiversity preservation, using quota rights in the Northern Atlantic Fishery as a laboratory. Our identification strategy exploits regulatory heterogeneity in the strength of commercial fishing quota rights and uses granular data on fishing vessels, catches, and species population. We find that stronger property rights are associated with a decrease in both fish populations and annual fish landings. These effects are especially pronounced for groundfish. This ecological impact appears to be driven by a change in the production function of commercial fishing when property rights are strong. Stronger property rights result in a higher intensity of large-scale trawling, a fishing technique known for its large and negative environmental externalities.

Contact person: Rasmus Kehlet Skjødt Berg