Do Catch Shares End the Race to Fish and Increase Ex Vessel Prices? Evidence from U.S. Fisheries

Catch shares appear to lower fishing costs by eliminating redundant capacity. Theory suggests that catch shares may also alter within-season behavior and generate revenue benefits through improved market timing, higher product quality, and changes in the fresh/frozen product mix. Do catch shares alter within-season behavior to end the race to fish? Do catch shares cause ex vessel prices to increase? Despite compelling theory and anecdotal evidence, there is little systematic causal evidence to support these hypotheses. We test both hypotheses for all U.S. catch share fisheries using an individually matched control fishery for each treated fishery and a difference-in-differences estimation approach. We find strong evidence that catch shares cause season decompression consistent with the theory that rights-based management ends the race to fish. However, evidence for price increases is weak, and, on average, our models suggest price decreases. To the extent that catch shares produce benefits on the revenue side, these benefits do not appear to manifest in ex vessel prices. We discuss potential confounding factors in fishing revenues and the need for a richer theoretical understanding of transitions to rights-based management. JEL Codes: Q22