Testing for structure and measuring scale effects in the Norwegian cod fishery: A panel data approach

This study combines panel data set approaches with dual cost function methodology to model and test for structure of production in the Norwegian Cod fishery. In this study, we describe the theorems and applications of duality theory and dual cost function in the fishery. Some econometric procedures such as random effects and fixed effects estimation techniques are employed to solve the unobserved heterogeneity in the data set. Utilizing the Seemingly Unrelated Regression (SUR) procedure with the fixed effects approaches, the technical changes and scale effects of the Norwegian fishery are detected.; In this study, after a series of econometric estimation procedures, we compare results of random effect vs. fixed effects estimation technique; long-run vs. short-run equilibrium model; own-price elasticities, elasticities of substitution and scale effects. Finally, we compare the "ideal" results with the results reported in Asche, Bjorndal and Gordon (2003) that use cross-section data for the Norwegian Cod fishery.; The empirical results validate that the panel data sets are more useful in estimating both the technical changes and scale effects in the fishery than either time series or cross-section data sets. Moreover, the results confirm that the fishermen perform under the IVQs and TAC management regulations without race to fish in the Norwegian Cod fishery.