Quotas, Alternative Technologies, and Immiserization

This paper studies the relationships between technical change and welfare under a production quota regime. The conditions for producer impoverishment and quota owner impoverishment under technical change are identified. Whether the relative efficiency of a marketable quota regime is robust to the choice of technologies is also considered, as is the immiserization motive for banning a technology. The paper demonstrates that two or more technologies may exist in equilibrium and that the adoption of a technology may depend on the marketability of quota.