Asset Pricing in Created Markets

14 Pages Posted: 24 Apr 2020

See all articles by Richard G. Newell

Richard G. Newell

Duke University - Nicholas School of Environment; National Bureau of Economic Research (NBER); Resources for the Future

Kerry L. Papps

Cornell University

James N. Sanchirico

University of California

Multiple version iconThere are 2 versions of this paper

Date Written: May 2007

Abstract

We investigate the applicability of the present‐value asset pricing model to fishing quota markets by applying instrumental variable panel data estimation techniques to 15 years of market transactions from New Zealand's individual transferable quota (ITQ) market. In addition to the influence of current fishing rents, we explore the effect of market interest rates, risk, and expected changes in future rents on quota asset prices. The results indicate that quota asset prices are positively related to declines in interest rates, lower levels of risk, expected increases in future fish prices, and expected cost reductions from rationalization under the quota system.

Keywords: asset pricing, fishery management, tradable permits

Suggested Citation

Newell, Richard G. and Papps, Kerry L. and Sanchirico, James N., Asset Pricing in Created Markets (May 2007). American Journal of Agricultural Economics, Vol. 89, Issue 2, pp. 259-272, 2007, Available at SSRN: https://ssrn.com/abstract=3583765 or http://dx.doi.org/10.1111/j.1467-8276.2007.01018.x

Richard G. Newell (Contact Author)

Duke University - Nicholas School of Environment ( email )

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Resources for the Future ( email )

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Kerry L. Papps

Cornell University

Ithaca, NY 14853
United States

James N. Sanchirico

University of California

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Davis, CA 95616
United States

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