Fishery share systems and ITQ markets: who should pay for quota?

Although, in most commercial fisheries, fishing crews are remunerated under a share system, the implications of share systems for ITQ markets have received relatively little attention. In this paper we explore the impact of extending crew shares of vessel operating costs to include the cost of quota. We find that efficiency is maintained as long as any share system is adopted across the entire fleet. Making crews pay a share of quota costs, however, simply inflates the quota price at their expense: at market equilibrium the vessel owner’s total profit share is unaffected. We also consider the outcome if only net purchasers of quota involve crews in the cost of quota. Here, all vessel owners benefit, while all crews see a reduction in their earnings. These results are illustrated with a simple numerical example. The implications for resource rent capture policies are briefly considered.