A theoretical model with nonlinear discarding costs is constructed to describe highgrading in a fishery with an Individual Transferable Quota (ITQ) program. The model shows that ITQs provide incentives to discard fish when the hold capacity of the vessel is nonbinding. An empirical model is...

Fishers in quota-regulated fisheries find it to their advantage to discard less valuable fish at sea to increase the value of their catch. A theoretical model describing the high-grading behavior of fishers is presented, and an empirical model is derived as well as a testing strategy to test for...