Asset pricing in created markets
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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. © 2007 American Agricultural Economics Association.
Published Version (Please cite this version)10.1111/j.1467-8276.2007.01018.x
Publication InfoNewell, RG; Papps, KL; & Sanchirico, JN (2007). Asset pricing in created markets. American Journal of Agricultural Economics, 89(2). pp. 259-272. 10.1111/j.1467-8276.2007.01018.x. Retrieved from https://hdl.handle.net/10161/6753.
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Dr. Richard G. Newell is the President and CEO of Resources for the Future (RFF), an independent, nonprofit research institution that improves environmental, energy, and natural resource decisions through impartial economic research and policy engagement. From 2009 to 2011, he served as the administrator of the US Energy Information Administration, the agency responsible for official US government energy statistics and analysis. Dr. Newell is an adjunct professor at Duke University, where he