A Model for Quota Prices in the Norwegian Groundfish Fishery

ABSTRACT Tradable quotas support efficiency and value creation in fisheries. Quota values can provide useful information in several aspects, as they are related to the resource rent and may figure in estimates of natural capital. Further, willingness to pay for quota can shed light on management tradeoffs. Quotas in the Norwegian groundfish fishery are, however, not traded on an open market platform, and prices are not generally known. Based on a model for the spatiotemporal distribution of catch for Norwegian trawlers, providing an estimate for operational profits, I calculate marginal values of changes in the quota holding of a representative vessel. For example, willingness to pay for a metric ton of cod quota is roughly NOK 80,000. The inferred willingness to pay is dependent on existing quota levels, and is conditional on binding quotas for bycatch species. The dependence on existing quota levels is different when bycatch quotas are non‐binding. The calculations presume that the quota is added to a vessel with available capacity such that no additional fixed or capital costs are necessary. The underlying model represents the planning problem of a fisher faced with quotas for several species, when prices vary over time and catch‐per‐unit‐effort varies over time and between areas.