Privatization and Regulation of Capacity in a Multi-Product Fishery: A Purse from a Sow’s Ear?

Using individual firm data from before and after the introduction of ITQs in the multispecies Nova Scotia mobile gear fishery, data envelopment analysis (DEA) is used to examine issues relating to capacity and capacity utilization. The paper is the first to look at capacity utilization in the context of a multi-species fishery that has both ITQ and nonITQ components. The paper examines how a change in the property rights regime can affect a multi-product industry and the consequences of these changes in terms of product-specific capacity utilization, as well as aggregate capacity utilization. The results provide insights to regulators interested in using market-based approaches to improve efficiency in multi-product industries. The results are not necessarily those of the U.S. National Marine Fisheries Service.