Economics Seminar Practice Job Talk: Phuong Ho, Centre for Applied Research at Norwegian School of Economics (NHH).

When

9 a.m. to 10 a.m. Sept. 24, 2021

Where

The Zoom link will be emailed to the Economics Seminar listserv.

Phuong Ho, Postdoctoral Researcher, Centre for Applied Research at Norwegian School of Economics (NHH).

Trading for Economies of Scale: The Cost Efficiency of Cap-and-Trade in Common-Pool Resource

Abstract: I introduce a method to estimate time-varying and individual-specific economies of scale using output and input quantity data. The method relies on the cost-minimizing condition of the input choice problem and output elasticities of inputs from the production function estimation. I use the method to explore how cap-and-trade in common-pool resource, relative to command-and-control, affects the implied economies of scale and production cost. Using the case of Norwegian cod fishery, the main framework is to use difference-in-difference estimators to investigate the changes in the outcomes of interest (including the estimated measure for economies of scale) from before to after the cap-and-trade implementation between trade-qualified vessels and non-qualified vessels. I find the trading scheme has increased catch quantity and revenue of vessels that acquired additional caps (quotas). The scheme did not affect fish sales prices but increased productivity and offered cost savings in harvest. Because vessels were having economies of scale, additional quotas from the trading program offered cost advantages and moved the production costs toward the minimum average cost levels.

 

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