Rational ecosystem-based fisheries management: An application to the GOM commercial reef fish fishery

Ecosystem-based fisheries management (EBFM) seeks to integrate the full complexity of real-world marine ecosystems into the design of fisheries management policies and regulations. EBFM is practiced currently with the help of complex ecosystem process models that track and simulate numerous ecosystem elements/organisms across space and time. For simplicity and to maintain tractability, the fishing sector component of process models maintain restrictive assumptions for harvesting technologies, fishing behavior, regulations, and fishing sector response to changing stock conditions. Predictions of fishing sector-ecosystem interaction obtained under these assumptions can grossly misinform EBFM policy design. An alternative rational fishing model is presented and applied to the Gulf of Mexico commercial reef fish fishery. The model relaxes the restrictive assumptions currently in use highlighting stark differences in ecological and external validity across modeling approaches. While models of rational fishing are data and computationally demanding, results show that improved validity they deliver may be essential to further advance the EBFM paradigm

A general approach for estimating the translog function in the presence of zero-value agruments

The transcendental logarithmic (translog) function is a familiar choice in applied econometric work. It has been shown to exhibit superior approximations to unknown direct and indirect economic objective functions (Driscoll; Guilkey, Knox Lovell and Sickles; Stem). Fitting the translog function to consumer or firm level micro-data can encounter zero values for some function arguments. For example, a subset of consumers may not purchase strictly positive quantities of all goods in a choice set, or firms may be observed to employ a subset of available inputs in production. Because the natural logarithm is undefined at zero, the translog function cannot be estimated directly. To facilitate the logarithmic transformation, researchers typically modify zero-value arguments by either replacing them with arbitrarily small values or by applying the Box-Cox transformation

Individual fishing quotas in the eastern Gulf of Mexico grouper fishery: fleet restructuring, effort reduction and cost savings

This paper estimates a structural model of multiple-species harvesting costs in the eastern Gulf of Mexico reef fish fishery. The calibrated model is used to predict fleet size, vessel-level harvesting activity and fleet-wide revenues and costs that are expected under a proposed individual fishing quota (IFQ) management program for grouper species. Results suggest that significant fleet downsizing, scale economies and pure efficiency gains will emerge under IFQs. Overall, IFQs appear to be an attractive alternative to the current controlled access management program in the fishery

Economic benefits of management reform in the Gulf of Mexico grouper fishery: a semi-parametric analysis

This paper uses a semi-parametric empirical model to estimate the economic benefits of adopting a property rights-based management program in the Gulf of Mexico grouper fishery. The analysis predicts that a rights-based fleet will be comprised of fewer, more cost efficient boats than under the current controlled access management program. Results indicate that in the year of our data, 1993, the smaller, more productive fleet could harvest the allowable reef fish catch at a cost saving of $2.92-$7.07 million, 12-30% less than under controlled access management. Recent tightening of controlled access regulations suggest that the benefits from management reform could be even larger in the current day fishery

Economic Benefits of Management Reform in the Gulf of Mexico Grouper Fishery: A Semi-Parametric Analysis

This paper uses a semi-parametric empirical model to estimate the economic benefits of adopting a property rights-based management program in the Gulf of Mexico grouper fishery. The analysis predicts that a rights-based fleet will be comprised of fewer, more cost efficient boats than under the current controlled access management program. Results indicate that in the year of our data, 1993, the smaller, more productive fleet could harvest the allowable reef fish catch at a cost saving of $2.92-$7.07 million, 12-30% less than under controlled access management. Recent tightening of controlled access regulations suggest that the benefits from management reform could be even larger in the current day fishery.

Information Sharing and Cooperative Search in Fisheries

We present a dynamic game of search and learning by fishermen who seek the true location of a partially observable fish stock. Bayesian Nash equilibrium search patterns for non-cooperating fishermen and members of an information sharing cooperative are compared with first-best outcomes. Independent fishermen do not internalize the full value of information and do not replicate first-best search. A fishing cooperative faces a free-riding problem as each member prefers another undertake costly search for information. Contractual agreements among coop members may mitigate, but not likely eliminate free-riding. Our results explain why information sharing is rare in fisheries and offer guidance for improving fishery management

Fishing behavior across space, time and depth: with application to the Gulf of Mexico reef fish fishery [Fishing behavior across space and time]

We introduce a model of fishing behavior that features costly targeting of a spatially and temporally heterogeneous, multiple-species fish stock. We characterize fishing behavior under species-specific regulations including time-area-depth closures, per-trip landings limits and tradable harvest permits. Our behavioral model yields a system of Kuhn-Tucker necessary conditions which form the basis of our empirical estimation. Data from the Gulf of Mexico commercial reef fish fishery are used to estimate the model. The estimated harvest technology exhibits local weak output disposability which are linked to spatially and temporally dependent stock conditions in the reef fish fishery. The model predicts harvests, discards and fishing profit across multiple species, and importantly across continuous space and time dimensions. Policy simulations further identify behavioral responses to closure regulations, individual tradeable quota management and recent sea turtle bycatch management rules which impose limits on fishing depth. Our model overcomes limitations of discrete choice spatial fishing behavioral models, and offers a powerful tool for improving regulation of spatially and temporally heterogeneous, multi-species fisheries

Information Sharing and Cooperative Search in Fisheries

We present a dynamic game of search and learning about the productivity of competing fishing locations. Perfect Bayesian Nash equilibrium search patterns for non-cooperating fishermen and members of an information sharing cooperative are compared with first-best outcomes. Independent fishermen do not internalize the full value of information, and do not replicate first-best search. A fishing cooperative faces a free-riding problem, as each coop member prefers that other members undertake costly search for information. Pooling contracts among coop members may mitigate, but are not likely to eliminate free-riding. Our results explain the paucity of information sharing in fisheries and suggest regulators use caution in advocating cooperatives as a solution to common pool inefficiencies in fisheries

Nitrogen Management under Uncertainty: An Investigation of Farmers’ Decision Processes

Des Moines Water Works has recently threatened a lawsuit against three upstream Iowa counties they claim are responsible for excessive nitrate loading in the Raccoon and Des Moines rivers. Excess nitrate loads, which must be reduced before water is safe to drink, is reported to have cost Des Moines taxpayers upwards of $1 million in 2013. The cost of nitrate removal, which could include investment in new treatment capacity, will continue, and may grow, unless steps are taken to reduce nitrate runoff from agriculture. While such water treatment is costly, yield losses may be more costly if rates are capped by regulations. The problem is complicated because of uncertainty over weather and soil conditions producers face when making their nitrogen use decisions. Furthermore, weather largely dictates how much of the applied nitrogen leaves the fields

Search and active learning with correlated information: Empirical evidence from mid-Atlantic clam fishermen

This paper examines search with active learning and correlated information. We first develop a simple model to show how correlation affects the decision to acquire information. A unique data set on fishing site choice by mid-Atlantic clam fishermen is used to test the model predictions. Results find that clam fishermen search new sites when the catch at familiar sites declines, i.e., when the opportunity cost of gathering information is low, and also when catch at familiar sites is on the rise. Search following a catch decline occurs at spatially distant sites whereas search following a catch increase occurs at nearby sites. Correlated learning is crucial for explaining the site choice patterns in our data. These results provide new insights that may extend to a variety of economic search problems where correlated learning is important