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Subsidizing Compliance: A Multi-Unit Price List Mechanism for Legal Fishing Nets at Lake Victoria

Diekert, Florian ; Eymess, Tillmann ; Goeschl, Timo ; Gómez-Cardona, Santiago ; Luomba, Joseph

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Like many common-pool resources, the Lake Victoria fisheries are characterized by poor compliance with production input regulations that are intended to reduce overexploitation. To explore the use of input subsidies to increase compliance, we determine the subsidy level required to induce demand for legal fishing nets, thereby compensating fishermen for loss of productivity net of enforcement risk. Our study additionally tests the subsidy-enhancing effect of a norm-nudge. A new multiple price list mechanism for eliciting revealed willingness to pay for multiple units of a production input is developed, adapted to the demands of a challenging field setting, and implemented with 462 fishermen at 20 landings sites on the Tanzanian lakeshore. Consistent with the high prevalence of illegal fishing gear at our sites, we find a zero median demand for legal net panels at local market prices. The subsidy required to shift median demand to at least one legal net panel is a 21% discount. Norm-nudging generates no policy-relevant enhancement of the subsidy.

Document type: Working paper
Series Name: Discussion Paper Series, University of Heidelberg, Department of Economics
Volume: 0711
Place of Publication: Heidelberg
Date Deposited: 09 Mar 2022 13:32
Date: 22 February 2022
Number of Pages: 39
Faculties / Institutes: The Faculty of Economics and Social Studies > Alfred-Weber-Institut for Economics
DDC-classification: 330 Economics
Controlled Keywords: subsidies
Uncontrolled Keywords: compliance, natural resource management
Series: Discussion Paper Series / University of Heidelberg, Department of Economics
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