Harvesting technology and catch-to-biomass dependence: The case of small pelagic fish

This note deals with a harvesting model for a single stock fishery. In the case of small pelagic fish it seems reasonable to consider harvest functions depending nonlinearly on fishing effort and on fish stock. Empirical evidence about these fish species suggests that marginal catch does not necessarily react in a linear way to changes in fishing effort and fish stock levels. This is in contradiction with traditional fishery models where catch-to-input marginal productivities are normally assumed to be constant. While allowing for non linearities in both catch-to-effort and catch-to-stock parameters, this note extends the traditional analysis by focusing on the dependence of the stationary solutions upon the nonlinear catch-to-biomass parameter. Given the emphasis on the case of small pelagic fish, the analysis considers positive but small values for the catch-to-stock parameter.small pelagic fisheries, harvesting functions, Cobb-Douglas production function, optimal control, maximum principle.

Catch Efficiency in the Chilean Pelagic Fishery: Does size matter ?

This paper examines the determinants of technical efficiency for a sample of 204 industrial vessels operating in the Southern-Central pelagic fishery of Chile during the 1985-95 period. Data on vessel's annual landings and fishing effort, vessel's size, age, fishing experience and vessel's controlling firm are analysed considering a Translog stochastic frontier model à-la Battese-Coelli (1995), which includes a vessel-specific inefficiency model. Yearly averages for vessel efficiency vary from 50% to 86%. Close to 90% of the residuals' total variance is accounted by the inefficiency term, suggesting a significant disparity in vessels' catch performance. Vessel age and scale of operation are found to be significant in explaining efficiency. Larger vessels tend to be the most efficient and the ones showing least variance in their efficiency. Smaller vessels, which on average are also the oldest in the fleet, show greater dispersion and lower efficiency scores. We confirm prior results suggesting vessel-level economies of scale at this fishery, related to fishing effort intensity. Explanatory variables aggregated at the ship-owner level, which aim at controlling the firm's operating scale, are also significant as a whole when explaining vessel-level efficiency. We find positive search externalities associated to the number of vessels under control of a given firm, as well as external diseconomies related to each firm's fleet use. Overall, we report significant productive heterogeneity in the fleet under study where control variables associated to 'size effects' do indeed play a significant role.

Informal Markets, Perishability and Vertical Control: Brokerage of Artisanal Landings

This is a case study of the institutional changes occurring since the late 1990s at the Chilean Austral Hake (Merluccius Australis) artisanal fishery. This high-value exporting fishery, specialized in selling fresh-chilled products, represents a pioneering case of self-government developments within small-scale fishing communities exploiting mobile marine resources in Chile. Despite entry restrictions and global catch quotas, this fishery faced a productivity crisis between the late 1980s and the second half of the 1990s. Consequently, the fishermen started talks with the Government in order to introduce new management rules. After gradual evolution, today there prevails a well-developed system of de facto individual non-transferable quotas which are subject to a high degree of self-management by fishermen organisations. In order to understand the conditioning factors behind the exchange solutions found at this fishery, an analysis is provided of the industrial concentration and the strategies of vertical control between transacting parties along the production and marketing stages. The contractual issues analysed are: the use of informal markets, interlinkage contracting, temporal specificity due to product perishability, the use of different instruments of vertical control and the influence of increasing industrial concentration as we advance through the wholesale marketing channel and get closer to the retailing stages at final export markets.Food production and marketing, Production chains, Vertical control, Artisanal fishery, Chilean Austral Hake

Downward Adjustments in a Cyclical Environment: The Case of Chilean Pelagic Fisheries

Often the scale of production of many industrial fisheries in the world shows rigidity vis à vis declines in fish abundance, which on occasions has generated fishing collapse. This paper studies the two fisheries with the greatest volume of landings in Chile, and which are also characterized by strong variability in their abundance. Production-side aspects that affect the incentives to adjust towards lower fishing efforts are analyzed. To do so, production functions for industrial fleets at each fishery are estimated by resorting to panel data. Two main results are obtained. First, we confirm the empirical relevance of Translog harvest technologies. This contradicts a frequent practice in bioeconomic models, which considers harvest-inputs elasticities as being constant and independent from the scale of production. Second, a set of production-side effects are identified that weaken the incentives to adjust towards lower fishing efforts: increasing returns in the use of variable inputs, which are also strengthened by external economies associated to the aggregate searching effort for fish, and catch yields sensitive to changes in abundance, but where the strength of this effect decreases as abundance declines.

'El Niño' Effects and Biomass Endogeneity in a Harvest Function: The Chilean Jack Mackerel Fishery

The main goal of this paper consists in estimating the input parameters of an annual harvest function for the Chilean jack mackerel stock; particularly, the effects of biomass on catch. One of the main problems faced is that the biomass variable is possibly endogenous, which would bias the estimators if the problem remains unsolved. Our empirical strategy consists in estimating a per vessel harvest function using panel data, which allows us to control for vessels' unobserved heterogeneity, and episodes of 'El Niño' phenomenon as valid instrumental variable for biomass, which allows us to control for the potential biomass endogeneity. This strategy produces consistent estimates of the biomass coefficient. The results, using a panel of industrial vessels operating in the central-southern region of Chile during the period 1985-2002, show that the endogeneity of the biomass variable biases upwardly the magnitude of its coefficient in a Cobb-Douglas harvest function. In the case of our data, the endogeneity bias even changes the sign of the catch-to-biomass elasticity. A first contribution of the paper is to address the endogeneity of biomass in a harvest function, an issue often underestimated in the empirical literature. A second contribution is related to 'El Niño' effects on the Chilean jack mackerel stock. The results show that an oceanic 'El Niño' episode not only has negative contemporaneous effects on jack mackerel biomass but also negative biomass effects lasting for at least two additional years.El Niño phenomenon; pelagic fisheries; Chilean jack mackerel; Instrumental variable estimation; marginal stock effects; endogenous biomass

Disuación de entrada, subastas repetidas y divisibilidad del objeto en venta

This paper analyzes entry deterrence strategies at sequential multi-unit English-type repeated auctions, motivated by entry deterrence observed at a series of yearly auctions of fishing rights occurring since the early 1990s in the Chilean Sea Bass industrial fishery. It analyzes parametric configurations under which incumbent firms may have followed non-cooperative entry deterrence strategies or else may have colluded for that purpose. A two-stage competition model is developed. In the first stage there occurs sequential auctioning of multiple fishing rights; in the second stage, production rights are used to compete in a homogeneous-good Cournot market. The analysis focuses on the relationship between the number of incumbents, sources of competitive advantage for them (relative to potential entrants) and the number and productive size of the multiple production rights in sale. The core of the analysis lies in answering how does the divisibility of the object(s) in sale affect the possibilities of incumbent firms for deterring the entry of new rivals.Collusion; Entry Deterrence; Repeated Auctions; Free Riding.

Auctions, Entry Deterrence and Divisibility of the Object for Sale

This paper analyzes entry deterrence strategies at sequential multi-unit English-type repeated auctions, based on entry deterrence observed at a series of yearly auctions of fishing rights occurring since the early 1990s in the Chilean sea bass fishery. It analyzes parametric configurations under which incumbent firms could have followed non-cooperative deterrence strategies or else may have colluded for that purpose. A two-stage competition model is developed. In the first stage there occurs sequential auctioning of multiple fishing rights; in the second stage, production rights are used to compete in a homogeneous-good Cournot market. The analysis focuses on the relationship between the number of incumbents, sources of competitive advantage for them, and the number and size of the rights for sale. The core of the analysis lies in answering how the divisibility of the object(s) for sale affects the possibilities of incumbents to deter new rivals’ entry.