Fondazione Eni Enrico Mattei

This paper develops and tests a dynamic optimization model of fishermen’s investment behavior in a limited-entry fishery. Because exit from limited-entry fisheries may be irreversible, the fisherman has an incentive to maintain the right to fish (whether by actually fishing or by purchasing an annual license) even when the fishery is not profitable, in the hope that conditions may improve. This incentive provides at least a partial explanation for excess capacity in fishing fleets, one of the most pressing fisheries management issues in limited-entry (and other) fisheries around the world. To assess the ability of simple financial models to explain observed investment behavior, we develop a two-factor (price and catch) real options model of the decision problem faced by an active fisherman who has the option to exit a fishery irrevocably. The immediate reason for adopting a two-factor model is the hope of achieving greater predictive power, since obviously both price and catch are important to fishermen’s decisions. Another advantage to this approach is that it provides a mechanism by which investment behavior can be linked in a real options framework to exogenous factors that affect price and catch separately. For example, international market forces are likely to affect price while having a negligible effect on a local fish stock, while local fish stock dynamics may affect catch directly but have little influence on prices (assuming the demand for a particular fish is relatively elastic). In a comparison of model predictions about fishermen’s exit decisions to 5059 observed decisions in the California salmon fishery in the 1990s, 65% of the model’s predictions are correct, suggesting this approach may be useful in the analysis of fishing fleet dynamics.Real option investment, Numerical methods, Fisheries

Bayesian Ranking and Selection of Fishing Boat Efficiencies

The steadily accumulating literature on technical efficiency in fisheries attests to the importance of efficiency as an indicator of fleet condition and as an object of management concern. In this paper, we extend previous work by presenting a Bayesian hierarchical approach that yields both efficiency estimates and, as a byproduct of the estimation algorithm, probabilistic rankings of the relative technical efficiencies of fishing boats. The estimation algorithm is based on recent advances in Markov Chain Monte Carlo (MCMC) methods—Gibbs sampling, in particular—which have not been widely used in fisheries economics. We apply the method to a sample of 10,865 boat trips in the US Pacific hake (or whiting) fishery during 1987–2003. We uncover systematic differences between efficiency rankings based on sample mean efficiency estimates and those that exploit the full posterior distributions of boat efficiencies to estimate the probability that a given boat has the highest true mean efficiency.Ranking and selection, hierarchical composed-error model, Markov Chain Monte Carlo, Pacific hake fishery, Resource /Energy Economics and Policy, Q2, L5, C1,

Real Options Analysis of Fishing Fleet Dynamics: A Test

This paper develops and tests a dynamic optimization model of fishermen's investment behavior in a limited-entry fishery. Because exit from limited-entry fisheries may be irreversible, the fisherman has an incentive to maintain the right to fish (whether by actually fishing or by purchasing an annual license) even when the fishery is not profitable, in the hope that conditions may improve. This incentive provides at least a partial explanation for excess capacity in fishing fleets, one of the most pressing fisheries management issues in limited-entry (and other) fisheries around the world. To assess the ability of simple financial models to explain observed investment behavior, we develop a two-factor (price and catch) real options model of the decision problem faced by an active fisherman who has the option to exit a fishery irrevocably. The immediate reason for adopting a two-factor model is the hope of achieving greater predictive power, since obviously both price and catch are important to fishermen's decisions. Another advantage to this approach is that it provides a mechanism by which investment behavior can be linked in a real options framework to exogenous factors that affect price and catch separately. For example, international market forces are likely to affect price while having a negligible effect on a local fish stock, while local fish stock dynamics may affect catch directly but have little influence on prices (assuming the demand for a particular fish is relatively elastic). In a comparison of model predictions about fishermen's exit decisions to 5059 observed decisions in the California salmon fishery in the 1990s, 65% of the model's predictions are correct, suggesting this approach may be useful in the analysis of fishing fleet dynamics

An Approach To Managing Fisheries When Weak And Strong Stocks Mix

When weak and strong fish stocks are caught in the same fishery, managing for the protection of the weak stock may result in foregone economic benefits from harvest of the strong stock, while managing for the strong stock may result in overfishing of the weak stock. A particular complication arises when the stocks are not easily distinguished in the catch, for example when the stocks are of the same or a similar species. This paper demonstrates how the partially observable Markov decision process can be used to explore policy options for managing mixed-stock fisheries when the stocks are imperfectly identified.Keywords: Fisheries Economics, Mixed-stock fisheries, Partially observable Markov decision process, Week and strong stocksKeywords: Fisheries Economics, Mixed-stock fisheries, Partially observable Markov decision process, Week and strong stock

LONG-TERM FORECASTING OF INTERNATIONAL FOREST PRODUCT MARKETS: THE GFPM MODEL AND IMPLICATIONS FOR EUROPE

The Global Forest Products Model (GFPM) was developed to upgrade the FAO methodology for forest products outlook projections. Its purpose is to analyze and project the consumption, production, trade, and prices of forest products. The system deals with 180 individual countries, three classes of roundwood, sawnwood, three kinds of panels, three of pulp, waste paper, and three types of paper and paperboard. The system is built on market equilibrium theory, with imperfect foresight. The short-term equilibrium is modeled by price-endogenous linear programming determining production, consumption, trade, and market-clearing prices in any given year, subject to short-term capacities of production. Year to year changes are represented by equations predicting shifts in demand due to GDP growth, capacity expansion as a function of profitability, and technical change. The forecasts are conditional on exogenous estimates of timber availability in each country. Inertia constraints limit the short-term adjustment of trade in response to market forces. Results of applications of the model to forecast the situation in European countries until 2010 are described.International Relations/Trade,

Duration Analysis of Fleet Dynamics

Though long a standard technique in engineering and medical research, duration or survival analysis has become common in economics only in recent decades, and in fisheries economics we are aware of only one previous study. In this paper, we demonstrate the usefulness of duration analysis to understanding fleet dynamics, specifically to predicting fishers’ exit decisions. The analysis explores the dependency of these decisions on the length of time during which a fisher has been active and on boat characteristics. We emphasize the development of a Bayesian approach to duration model estimation, and, through an application to the US Pacific salmon fishery, we show the policy relevance of duration analysis to limited-entry fisheries in particular

The role of phosphodiesterase 12 (PDE12) as a negative regulator of the innate immune response and the discovery of antiviral inhibitors

2',5'-Oligoadenylate synthetase (OAS) enzymes and RNase-L constitute a major effector arm of interferon (IFN)-mediated antiviral defense. OAS produces a unique oligonucleotide second messenger, 2',5'-oligoadenylate (2-5A), that binds and activates RNase-L. This pathway is down-regulated by virus- and host-encoded enzymes that degrade 2-5A. Phosphodiesterase 12 (PDE12) was the first cellular 2-5A- degrading enzyme to be purified and described at a molecular level. Inhibition of PDE12 may up-regulate the OAS/RNase-L pathway in response to viral infection resulting in increased resistance to a variety of viral pathogens. We generated a PDE12-null cell line, HeLaΔPDE12, using transcription activator-like effector nuclease-mediated gene inactivation. This cell line has increased 2-5A levels in response to IFN and poly(I-C), a double-stranded RNA mimic compared with the parental cell line. Moreover, HeLaΔPDE12 cells were resistant to viral pathogens, including encephalomyocarditis virus, human rhinovirus, and respiratory syncytial virus. Based on these results, we used DNA-encoded chemical library screening to identify starting points for inhibitor lead optimization. Compounds derived from this effort raise 2-5A levels and exhibit antiviral activity comparable with the effects observed with PDE12 gene inactivation. The crystal structure of PDE12 complexed with an inhibitor was solved providing insights into the structure-activity relationships of inhibitor potency and selectivity

Pollution, Health and Life Expectancy: How Environmental Policy Can Promote Growth

This article investigates the influence of environmental policy on growth assuming that the channel of transmission relies on the link between pollution, health and the survival probability, in an overlapping generations model à la Blanchard (1985) where growth is driven by a mechanism à la Romer (1986). We demonstrate that environmental policy has an ambiguous effect on growth in the steady-state when the detrimental impact of pollution on health and lifetime is taken into account: for low levels of taxation, environmental policy promotes growth while it is harmful to growth for high levels. Furthermore, we show that the environmental policy is more likely to promote growth (i.e. it stimulates growth for a wider range of environmental taxes) when public expenditures in health and/or the impact of pollution on health are important. Finally, using numerical simulations, we find that for the value of parameters chosen the environmental policy will be more likely to harm growth when agents smooth consumption over time

Trade, Technique and Composition Effects: What is Behind the Fall in World-Wide SO2 Emissions 1990-2000?

Combining unique data bases on emissions with sectoral output and employment data, we study the sources of the fall in world-wide SO2 emissions and estimate the impact of trade on emissions. Contrarily to concerns raised by environmentalists, an emission-decomposition exercise shows that scale effects are dominated by technique effects working towards a reduction in emissions. A second exercise comparing the actual trade situation with an autarky benchmark estimates that trade, by allowing clean countries to become net importers of emissions, leads to a 10% increase in world emissions with respect to autarky in 1990, a figure that shrinks to 3.5% in 2000. Additionally, back-of-the-envelope calculations suggest that emissions related to transport are of the same magnitude. In a third exercise, we use linear programming to simulate extreme situations where world emissions are either maximal or minimal. It turns out that effective emissions correspond to a 90% reduction with respect to the worst case, but that another 80% reduction could be reached if emissions were minimal

The Rule of the Jungle in Pakistan: A Case Study on Corruption and Forest Management in Swat

Corruption in the forest sector of Swat, Pakistan is impairing the sustainable management of forest. We analyze corruption in a case study setting against the backdrop of the reform options that are most often cited as possible solutions. As we highlight in this study, the crime and punishment approach is not feasibly implemented if the overall institutional environment is weak. Since countrywide overhaul of corruption through sweeping reform programs, the other reform approach, is a difficult and lengthy task, there is a need for an alternative kind of reform. In the case of a corruption-ridden centralised forest management regime, institutional reform should move away from enforcement of existing institutions and promote communal management of natural resources by locals