Rent Dissipation in Chartered Recreational Fishing: Inside the Black Box

landings taxes becomes negligible (τH_-L∣_φ=₁ = τL ) and can be viewed instead as a composite
“harvest” tax. It may, therefore, be desirous in such fisheries to divert limited monitoring and
enforcement resources away from dockside to on-vessel efforts (such as human observers or
electronic surveillance systems with random audits) to ensure that the full cost of harvest
mortality is enforced.

V. Some Practical Considerations

The previous section deduced a number of properties of an efficiently managed
recreational sector. We showed that efficiency could be achieved by using an extensive “price-
based” incentive system that taxed or subsidized all relevant inputs in order to convey the correct
signals to decision makers (both anglers and vessel owners) about the impacts of inputs on
fishing mortality.³¹ We showed that a parsimonious price-based system may also be used that
directly alters the price of the two principle determinants of fishing mortality, namely discard
and landings mortality. As we showed, mortality from both sources can be controlled either
indirectly (by taxing all relevant inputs) or directly. This mirrors a common finding in the
environmental economics literature, namely that pollution can be efficiently controlled by
altering the prices of all inputs according to their marginal contribution to pollution, or by
targeting pollution directly. A difference between our problem and pollution problems is that an
additional instrument on entry is required to avoid open access dissipation of rents, even with
corrective taxes on inputs or outputs.

³¹ The implication of (29) is not that all the listed taxes/subsidies be explicitly levied. Doing so would result in
redundant “double taxation” in one case. Specifically, given a tax on landings and all of the inputs of the harvest
function, a separate tax on fishing days is not needed. Nonetheless, Q+3 other inputs do require directed treatment.

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