The local effects of an innovation: Evidence from the French fish market.

Summary In this paper, we investigate the effects of the Danish seine which was introduced for a subsample of vessels on a single wholesale fish market in France. The goal was to mitigate the decrease in vessel profits due to the rise of gasoline prices. Estimations are conducted from transaction data over the 2009–2011 period during which the innovation was introduced. Using a difference-in-differences approach around the discontinuity, we find that the innovation has a large positive effect on quality, prices and profit of treated vessels. However, a shift in caught fish species is observed and new targeted species are fished very intensively. This suggests that quota management is needed to ensure the sustainability of fishing practices involving the new technology in the long run.