Does Factor Mobility Matter? A General Equilibrium Analysis of a Fishery Rationalization

Previous studies have used theoretical general equilibrium or empirical computable general equilibrium models to analyze the economic and welfare effects of fishery rationalization, adopting a simplistic assumption regarding factor mobility. This study relaxes the simplistic assumption and considers more possibilities of mobility when assessing the effects of rationalization using a computable general equilibrium model for the Gulf of Alaska groundfish trawl fishery. Results demonstrate that the effects of rationalization vary significantly across different factor mobility assumptions, suggesting that the effects computed based on the simplistic assumption could mislead fishery managers.