EFFECTS OF THE AMERICAN FISHERIES ACT ON CAPACITY, UTILIZATION AND TECHNICAL EFFICIENCY

The American Fisheries Act (AFA) of 1998 significantly altered the Bering Sea and Aleutian Islands pollock fishery by allowing the formation of harvesting and processing cooperatives and defining exclusive fishing rights. This paper uses data envelopment analysis and stochastic production frontier models to examine effects of the AFA on the fishing capacity, technical harvesting efficiency (TE), and capacity utilization (CU) of pollock catcher-processors. Results from multi-input, multi-output models indicate that fishing capacity fell by more than 30% and that harvesting TE and CU measures increased relative to past years. This work provides examples of how existing data, which is currently devoid of operator costs and provides only general indicators of earnings, may be used to analyze changes in elements of fleet and vessel performance in response to management actions.Resource /Energy Economics and Policy,

MEASURING FISHING CAPACITY: AN APPLICATION TO IN NORTH PACIFIC GROUNDFISH FISHERIES

This research provides estimates of fishing capacity for the pollock fishery of the Bering Sea and Aleutian Islands using DEA and stochastic frontier techniques. Capacity estimates are computed and compared under various model specifications, as well as before and after passage of the American Fisheries Act, which allowed for cooperatives in the pollock fishery.Resource /Energy Economics and Policy,

Measuring Productivity Change and Its Components for Fisheries: The Case of the Alaskan Pollock Fishery, 1994-2003

Traditional productivity measures have been much less prevalent than other measures of economic and biological performance in fisheries economics. It has been increasingly recognized, however, that modeling and measuring fisheries' production relationships is central to understanding and ultimately correcting the repercussions of externalities and poorly designed regulations. We use a transformation function production model to estimate productivity and its components for the Bering Sea and Aleutian Islands pollock fishery. We recognize the roles of externalities from pollock harvesting by incorporating data on environmental conditions, bycatch, and biomass stock, and capture regulatory impacts through fishing strategy indicators and fixed effects. We find that the productive contributions and interactions of environmental conditions, bycatch, and fishing strategies are statistically significant, and that regulatory changes have had both direct and indirect impacts on catch patterns.Fisheries Productivity, Regulatory Impacts, Bycatch, Environmental Factors, Primal Production Model, Productivity Analysis, Resource /Energy Economics and Policy,

Estimating Heterogeneous Primal Capacity and Capacity Utilization Measures in a Multi-Species Fishery

We use a stochastic production frontier model to investigate the presence of heterogeneous production and its impact on fleet capacity and capacity utilization in a multi-species fishery. Furthermore, we propose a new fleet capacity estimate that incorporates complete information on the stochastic differences between each vessel-specific technical efficiency distribution. Results indicate that ignoring heterogeneity in production technologies within a multi-species fishery, as well as the complete distribution of a vessel's technical efficiency score, may yield erroneous fleet-wide production profiles and estimates of capacity.Resource /Energy Economics and Policy,

EFFECTIVE COSTS AND CHEMICAL USE IN U.S. AGRICULTURAL PRODUCTION: BENEFITS AND COSTS OF USING THE ENVIRONMENT AS A "FREE" INPUT

This study uses a cost-function-based model of production processes in U.S. agriculture to represent producers' input and output decisions, and the implied costs of reductions in risk associated with leaching and runoff from agricultural chemical use. The model facilitates evaluation of the statistical significance of measured shadow values for "bad" outputs, and their input- and output-specific components, with a focus on the impacts on pesticide demand and its quality and quantity aspects. The shadow values of risk reduction are statistically significant, and imply increased demand for effective pesticides over time that stem largely from improvements in quality due to embodied technology, and that vary substantively by region.Environmental Economics and Policy, Farm Management,

Estimating Heterogeneous Capacity and Capacity Utilization in a Multi-Species Fishery

We use a stochastic production frontier model to investigate the presence of heterogeneous production and its impact on fleet capacity and capacity utilization in a multi-species fishery. Furthermore, we propose a new fleet capacity estimate that incorporates complete information on the stochastic differences between each vessel-specific technical efficiency distribution. Results indicate that ignoring heterogeneity in production technologies within a multi-species fishery, as well as the complete distribution of a vessel’s technical efficiency score, may yield erroneous fleet-wide production profiles and estimates of capacity. Furthermore, our new estimate of capacity enables out-of-sample production predictions predicated on either homogeneity or heterogeneity modeling which may be utilized to facilitate policy

MULTISPECIES REVENUE FUNCTION ESTIMATION FOR NORTH PACIFIC GROUNDFISH FISHERIES

Multiproduct, multispecies revenue functions are estimated for the midwater and bottom-trawl pollock fisheries off Alaska. There are strong year and seasonal effects on coefficient estimates, and the technology is joint in outputs for each major operation type. The model is a step toward prediction of fishery regulatory effects.Resource /Energy Economics and Policy,

Estimating Heterogeneous Primal Capacity and Capacity Utilization Measures in a Multi-Species Fishery

Efficient management of natural resources hinges on our ability to monitor and assess the status of the resource stocks as well as the actions and economic performance of the agents utilizing such resources. The sustainability and viability (both in physical and economic terms) of our resource management plans can in part be assessed by estimating the extractive or productive capacity of economic agents relying on a given resource. However, because of the limitations and uncertainty associated with the available data, particularly in the fishing industry, estimating the capacity and capacity utilization of the agents using the resource can be a difficult endeavor. Compounding the difficulties of estimating capacity is the heterogeneous nature of the agents using the resource. Heterogeneity in the agents implies that multiple production processes may exist, which must be accounted for when attempting to measure capacity and capacity utilization. This research addresses this concern by estimating heterogeneous capacity and capacity utilization, using latent class regression analysis, in the context of a multi-species fishery and it illustrates the complexities that arise in the presence of heterogeneous production technologies - a common situation in multi-species, multi-gear fisheries. Our results indicate that there exists substantial heterogeneity in the production technologies possessed by fisherman within the Eastern Bering Sea flatfish fishery. This in turn translates to differences in the capacity estimates generated using the heterogeneous production frontier model when compared to the traditional homogeneous model. Given the superior empirical fit of the heterogeneous production frontier, this indicates that traditional homogeneous production frontier will overestimate production capacity when heterogeneity in production technologies exists

Measuring Fishing Capacity and Utilization with Commonly Available Data: An Application to Alaska Fisheries

Due to a lack of data on vessel costs, earnings, and input use, many of the capacity assessment models developed in the economics literature cannot be applied in U.S. fisheries. This incongruity between available data and model requirements underscores the need for developing applicable methodologies. This paper presents a means of assessing fishing capacity and utilization (for both vessels and fish stocks) with commonly available data, while avoiding some of the shortcomings associated with competing “frontier” approaches (such as data envelopment analy

Fishing Revenue, Productivity and Product Choice in the Alaska Pollock Fishery

A key element in evaluating fishery management strategies is to examine their effects on the economic performance of fishery participants, yet nearly all empirical studies of fisheries focus on fishing as opposed to processing. However, the economic benefits derived from fish stocks are largely determined by the revenue generated from fish processing, which is linked to both the way fish are harvested and the products produced from the fish. In this study we econometrically estimate a (flexible) revenue function for catcher-processor vessels operating in the Alaskan pollock fishery, recognizing potential endogeneity and heterogeneous fishing inputs and conditions, to evaluate the factors underlying fishing revenue changes. In evaluating product choices we find significant own-price supply responses and product substitutability, and enhanced revenues from the increased number of days fished and number and duration of tows induced by regulatory changes associated with the American Fisheries Act of 1999. We also find significant growth in economic productivity, or higher revenues over time after controlling for observed productive factors and price changes, which exceeds that attributable to increased harvests