Standard Article

Rent and Rent Loss in the Icelandic Cod Fishery

  1. Ragnar Arnason

Published Online: 15 FEB 2011

DOI: 10.1002/9780470400531.eorms1005

Wiley Encyclopedia of Operations Research and Management Science

Wiley Encyclopedia of Operations Research and Management Science

How to Cite

Arnason, R. 2011. Rent and Rent Loss in the Icelandic Cod Fishery. Wiley Encyclopedia of Operations Research and Management Science. .

Author Information

  1. University of Iceland, Department of Economics, Reykjavik, Iceland

Publication History

  1. Published Online: 15 FEB 2011

Abstract

This article estimates current resource rents being generated in the Icelandic cod fishery and compares them to the maximum sustainable attainable ones. For this purpose, a simple aggregative model of the cod fishery is specified and empirically estimated. It is found that in spite of the cod stock being in a fairly depressed state, substantial economic rents are currently being generated in this fishery. No doubt this is primarily due to the effects of the ITQ system in this fishery. Current rents, however, are only about a third of the rents that would pertain in a profit maximizing sustainable position of this fishery. Thus, compared to the maximum, the Icelandic cod fishery appears to be subject to significant rent loss. Most of the rent gain from the current position of the fishery to the profit maximizing sustainable position is due to an increased cod stock. A much smaller part is due to reduced fishing effort.

Keywords:

  • fisheries rent;
  • fisheries rent loss;
  • Icelandic fisheries;
  • Icelandic cod fishery