Assessing the local effect of an innovation: an application to the French fish market.

Summary This paper proposes an evaluation of the effect of the introduction of a new fishing technique in Les Sables d'Olonne on the quality of the fish caught using the method of synthetic controls and the estimation of factor models. The estimates are conducted on aggregated data from French auctions over the period 2009-2012. Our preferred estimator of the effect of innovation with constant composition of the species caught is obtained with the factor model and corresponds to a 16.9% increase in the proportion of fish with the best quality. The synthetic control method leads to a smaller effect of the innovation (8.3%), but it is based on an interpolation of the Sables d'Olonne auction from the control auctions which is rather approximate.