THE INVISIBLE RESOURCE RENT IN LIMITED ENTRY AND QUOTA MANAGED FISHERIES: THE CASE OF NORWEGIAN PURSE SEINE FISHERIES

This paper tests empirically to what extent the rent in a limited entry and quota managed fishery is capitalized in the value of a vessel license. This is done by comparing the profitability of Norwegian purse seine vessels which received their licenses for free, to the profitability of vessels whose licenses were purchased along with the vessel. In a sample of forty-three vessels, thirty-one had obtained their licenses for free when the licensing system was introduced in 1973, whereas twelve owners had bought licensed vessels later on. Costs and earnings data for 1983 and 1984 show that those vessels which received free licenses had a significantly higher profitability than the other vessel group. The main reason for this is that the owners who bought licensed vessels had the highest capital costs. Policy implications of these findings are indicated.