This thesis focuses on the economic effects of introducing quotas to an open access fishery. When quotas are introduced, effort should decrease. This leads to higher prices and lower costs. Thus, overall profits should increase. An empirical analysis of profits in the Norwegian cod fisheries is conducted. Quotas were introduced in this fishery in 1990, and the dataset used covers 1985-2005. The research question is: Did profits rise in Norwegian fisheries for cod, after quotas were introduced?
Because the quotas limit the activity of the fishers, the stock is affected. In order to see whether quotas increased profits, it is necessary to do an analysis with levels of stock as it would have developed without the quotas. Therefore a simulation of the stock is done. This is used to simulate landings and profits.
The empirical results suggest that there have been a considerable increase in profits for the fishers after 1990. Few variables on effort and opportunities explain profits. Binary variables for years with and without quotas, however, explain a lot of the change in profits. The effects of other changes to policy and market conditions are also controlled for. These indicate that the quotas increased profits in two rounds. First right after the introduction, and then again some years later, as fishers started to trade quotas.