Distributional aspects of the Greenland halibut fishery

Abstract

Abstract In this paper, we describe distributional aspects of the economically optimal industry harvest and profit using Greenland halibut on the west coast of Greenland (Grl. halibut) as an empirical case. We depart from a theoretical model with two fleet segments (high-sea and coastal vessels) and introduce an exogenous equity weight on the coastal profit in a welfare function. The equity weight is assumed to be greater than or equal to one implying that the coastal Grl. halibut profit may potentially have a greater weight in the welfare function than the high-sea Grl. halibut profit. We describe the implications of gradually increasing the equity weight for the distribution of the optimal high-sea and coastal Grl. halibut harvest and profit. Regarding the Grl. halibut fish stock, we consider two alternative assumptions: (a) A common fish stock; and (b) Separate high-sea and coastal fish stocks. We find that the assumption about the fish stock is more important for the distribution of the optimal harvest and profit than the equity weight.