Revenue Targeting in Fisheries: The Case of Hawaii Longline Fishery

Abstract

We apply the target revenue model, a version of prospect theory, to investigate how fishermen adjust their trip length to changes in daily revenue. The key finding is that certain groups of fishermen seem more likely to behave according to the target revenue model rather than the standard model of labor supply. Asian American captains seem more likely to behave according to the target revenue model than Caucasian captains. We also find that vessel capacity has little effect on the captain’s decision making behavior. The study strongly supports the integration of prospect theory into the framework of labor supply analysis.Behavioral economics; Fisheries; Hawaii Longline; Prospect Theory; Target revenue model