ESTIMATING THE ELASTICITY OF SUBSTITUTION BETWEEN RESTRICTED AND UNRESTRICTED INPUTS IN A REGULATED FISHERY - A PROBIT APPROACH

Catch, effort, vessel, and skipper characteristic data for a sample of boats involved in the Tasmanian rock lobster fishery in the 1983/1984 season are used to estimate a fishing effort production function nested in a Cobb-Douglas fishery production function. The initial effort function is translog but tests suggest that the CES form cannot be rejected. The vessel's choice of fishing ground is modeled by a probit equation, the output from which is included in the OLS estimation of the production function. The elasticity of substitution between the inputs which are restricted by regulation and the other inputs is of particular interest as it determines whether input restriction is an efficient form of regulation for the fishery. The results suggest a value significantly less than unity. © 1991.