An Economic Analysis of the Fisheries Bycatch Problem

Bycatch is the incidental take of a species that has value to some other group. This paper compares open access and individual transferable quota equilibria to the equilibrium in which the joint value of the fisheries is maximized. The open access induced problems can be corrected by an individual transferable quota system only if both the target species and the bycatch species have tradable quotas, and only if the bycatch species does not have existence value. There exists a range of the bycatch-to-target species harvest levels for which the total harvest of each will be exactly taken by a given technology, even under open access. However, there may not even exist a unique open access equilibrium if bycatch is allocated by “rule of capture.” Prohibitions on the sale of bycatch reduce the bycatch level, but they also reduce social welfare.