Estimating the Induced Price Increase for Canadian Pacific Halibut with the Introduction of the Individual Vessel Quota Program

Abstract

British Columbia's Individual Vessel Quota (IVQ) system for Pacific halibut was implemented in 1991. Part of the anticipated benefits of an IVQ program for a formerly derby‐style fishery are derived from additional revenues generated from an increased season length, which allows for more of the product to be marketed fresh and for new market niches to be developed. This paper is one of the first to empirically examine the ex vessel price effects and the resulting revenue effects of an IVQ system for a derby fishery in which IVQs are imposed. It is found that the price received for B.C. Pacific halibut has increased substantially over what it would have been is there were no IVQ program, and that the price increase grew during the four years during which the program was implemented. The total revenue benefit from the IVQ system to the B.C. fishers over the four years examined totaled C$23·22 million.