| Summary: | This paper extends the method of virtual prices for quantity constraints to provide inverse derived demand functions for quotas and quota market equilibrium and pricing. The approach is applied to evaluate the anticipated effects of a potential program of individual transferable quotas addressing the ill-structured property rights and market failure of a multi-product common property fishery. The results indicate that individual transferable quotas on multiple products may not generate the desired rents or achieve biological objectives, owing to limitations when joint products are regulated. However, an individual transferable quota on a single joint product may induce industry disinvestment and reduce overcapitalization. Reprinted by permission of the publisher.
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