Practice Job Talk: Mauricio Collado University of California, Santa Barbara

Speaker

Mauricio Collado, University of California, Santa Barbara

Biography

I am a PhD candidate in Environmental Economics at the Bren School of Environmental Science & Management at the University of California, Santa Barbara. I study how regulators should design environmental and resource policy instruments (taxes, quotas, and bundles of them) when information about the underlying system is limited and outcomes are uncertain, with applications to renewable and non-renewable resources. In these cases, regulators cannot finely target behavior, goods, or bads. My research asks how relatively coarse instruments can still improve environmental and economic outcomes under uncertainty.

Title

"Quota Baskets Versus Fish Baskets in Fisheries"

Abstract

Because managing stocks individually is costly, many fisheries bundle multiple stocks and manage them with a single instrument. I study when such bundling is desirable and whether it should take the form of a shared quota or a shared landing fee, extending the constant-escapement framework of Reed (1979) and Weitzman (2002) to a multispecies fishery under ecological uncertainty.

The fundamental condition for a well-designed basket is equalizing marginal profits across species, a condition that combines biological productivity, harvesting costs, and prices.

Under this criterion, I find that the tax basket outperforms the quota basket. However, two qualifications refine this result: (i) both instruments coincide and are first-best when marginal profits are equalized at each species' optimal escapement in a deterministic setting; and (ii) as the number of species in the group increases, the quota's uncertainty loss is diversified away, reducing the average per-species welfare gap. Yet increasing the basket size has a second cost: the mismatch from pooling heterogeneous species grows with the number of species for both instruments. Larger baskets are not always better.

Bundling improves on species-specific management only when the monitoring costs it saves exceed this pooling loss.

JEL Classification Codes: Q22, Q28, Q58, D81