Towards a Theory of the Regulated Fishery

This paper develops a model of a modern regulated fishery in which direct biological controls such as gear restrictions and shortened seasons are used to control allowable harvest. Individual fishermen are assumed to make decisions regarding potential fishing and capacity in light of how they anticipate fellow fishermen and regulators to act. An equilibrium occurs in which there is excess capacity that is controlled at the fishery level to ensure aggregate harvest targets are not exceeded. Some discussion of alternative mechanisms such as direct limitations or taxes on potential effort and on individual fishermen is also presented.Environmental Economics and Policy, Resource /Energy Economics and Policy, Risk and Uncertainty,

Stranded Capital in Fisheries: The Pacific Coast Groundfish/Whiting Case

Current rationalization options for West Coast groundfish trawl fisheries include significant allocations of harvester quota to processors, justified as compensation for “stranded capital.†This article discusses the origin of the concept of stranded capital, its use in other policy settings, preconditions, measurement, and remedies for addressing it. Our main finding is that rationalization of fisheries is unlikely to generate significant processing stranded capital. Most capital involved in fisheries processing is malleable and not likely to be devalued as a result of rationalization. If policy makers nevertheless judge it desirable to consider compensation, a legitimate process would tie compensation to anticipated or demonstrated capital losses. Current policies proposed on the U.S. West Coast to transfer harvester quota are arbitrary and unsupported by empirical estimates of the magnitude of the problem. They are likely to generate important spillover effects that could negate some of the intended benefits of rationalization.Stranded capital, rationalization, malleable capital, processor compensation, Industrial Organization, Political Economy, Q22,

Thoughts on Capacity Analysis: Is Capacity Analysis Giving Policy Makers Information they Need?

Capacity, capacity analysis, DEA, Resource /Energy Economics and Policy, Q2, Q22,

Limited Entry Licensing: A Retrospective Assessment

This article takes a retrospective look at experience with limited entry licensing, with particular attention to events of the past decade since the Powell River Conference of 1978. The perspective is set by reviewing some of the issues raised early on in these programs' histories. This is followed with a synthesis of some of the important trends and characteristics of limited entry license programs. Finally, some speculative thought is offered regarding future directions for limited entry license programs and their roles in fisheries management.Environmental Economics and Policy, International Relations/Trade, Resource /Energy Economics and Policy,

Dynamics of Spatial Exploitation: A Metapopulation Approach

We present a bioeconomic model of a harvesting industry operating over a heterogeneous environment comprised of discrete biological populations interconnected by dispersal processes. The model generalizes the H. S. Gordon [1954]/V. Smith [1968] model of open-access rent dissipation by accounting for intertemporal and spatial "Ricardian" patterns of exploitation. This model yields a simple, but insightful, framework from which one can investigate factors that contribute to the evolution of resource exploitation patterns over space and time. For example, we find that exploitation patterns are driven by biological and fleet dispersal and biological and economic heterogeneity. We conclude that one cannot really understand the biological processes operating in an exploited system without knowing as much about the harvesting system as about the biological system.

Marine Reserves: Is There a Free Lunch?

This paper employs a spatial and intertemporal model of renewable resource exploitation to investigate the effects of marine reserve creation. The model combines the H. S. Gordon/Vernon Smith hypothesis of a rent dissipation process with Ricardian notions that resources are exploited across space in a pattern dependent upon relative profitabilities. The metapopulation model employed here incorporates modern biological ideas that stress patch heterogeneity, linkages, and dispersal processes between patches. The spatial bioeconomic model is then used to simulate the effects of reserve creation under various ecological structures. We find, under certain parameter configurations and ecological linkages, that there is potential for a "double-dividend" where both aggregate biomass and harvest increase after an area of the fishery is set aside and protected from exploitation.

The Impacts of Marine Reserves on Limited-Entry Fisheries

We utilize a spatial bioeconomic model to investigate the impacts of creating reserves on limited-entry fisheries. We find that reserve creation can produce win-win situations where aggregate biomass and the common license (lease) price increase. These situations arise in biological systems where dispersal processes are prevalent and the fishery prior to reserve creation is operating at effort levels in a neighborhood of open-access levels. We also illustrate that using strictly biological criteria for siting reserves (e.g., setting aside the most biological productive areas) will likely induce the most vociferous objections from the fishing industry. In general, we find that the dispersal rate and the degree the patches are connected play a significant role on the net impacts on the fishing sector.fisheries, limited-entry, marine reserves

Fisheries Production: Management Institutions, Spatial Choice, and the Quest for Policy Invariance

The fishery-dependent data used to estimate fishing production technologies are shaped by the incentive structures that influence fishermen’s purposeful choices across their multiple margins of production. Using a combination of analytical and simulation methods, we demonstrate how market prices and regulatory institutions influence a dominant short-run margin of production—the deployment of fishing time over space. We show that institutionally driven spatial selection leads to only a partial exploration of the full production set, yielding poorly identified estimates of production possibilities outside of the institutionally dependent status quo. The implication is that many estimated fisheries production functions suffer from a lack of policy invariance and may yield misleading predictions for even the most short-run of policy evaluation tasks. Our findings suggest that accurate assessment of the impacts of a policy intervention requires a description of the fishing production process that is sufficiently structural so as to be invariant to institutional changes.Ye

How can Fishery Comanagement Groups Enhance Economic Performance? Hints from Japanese Coastal Fisheries Management

Although comanagement is gaining increasing attention as a way to manage fisheries, few studies have attempted to understand quantitatively which factors of comanagement are critical for their success. This study investigates fishery comanagement regimes adopted by coastal fisheries in Japan. Utilizing a wide variety of examples of fishery comanagement nationwide, we search for key rules and measures that underlie traditional, cultural, and social aspects of comanagement. The study focuses on the rules of the game adopted by comanaging groups called fishery management organizations (FMOs). Upon examination of successful fishery comanagement cases, we found two distinctive measures: effort coordination and pooling arrangements. Furthermore, anecdotal evidence suggests that pooling arrangements are vital supporting measure for effective effort coordination, in which case having both of these two measures rather than only either one may be the key for successful fishery comanagement. We test this hypothesis with two sets of data. One is Japans fishery census, which was published by the government and offers a large sample size but lacks information on effort coordination. Another is data from a survey designed and conducted by the authors to supplement the information on effort coordination and other self-imposed regulations. Our results show that (1) merely establishing comanaging groups such as FMOs has limited effect; (2) FMOs that establish pooling arrangements earn greater revenue from their fishing efforts, particularly when such pooling arrangements are combined with effort-coordination; and (3) pooling arrangements and effort coordination coupled with marketing activities result in the greatest revenue.Resource /Energy Economics and Policy,