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« Back to Results

Fisheries Economics

Paper Session

Friday, Jan. 3, 2020 10:15 AM - 12:15 PM (PDT)

Manchester Grand Hyatt, Gaslamp D
Hosted By: Association of Environmental and Resource Economists
  • Chair: Kailin Kroetz, Resources for the Future

Benefits of Ecological Spillovers from Nutrient Management in a Coastal Estuary

Christopher C. Moore
,
U.S. Environmental Protection Agency
Stephen C. Newbold
,
U.S. Environmental Protection Agency

Abstract

In this paper we address two challenges faced by environmental policy analysts in the context of
an estuarine multi-species fishery: 1) the spatial extent of the ecological benefits are influenced by the
species’ dispersal and migration patterns and may not be confined to the area where habitat
conditions are improved, and 2) the sustainable magnitude of the benefits generally will depend on
the nature of the management regime in the affected fisheries.
We develop an integrated ecological and economic model of the effect of water quality
improvements on the biological production and commercial harvest of 14 fish and shellfish species in
the Chesapeake Bay. We use the model to estimate the benefits of the Chesapeake Bay watershed
nutrient management plan for producers and consumers of the modeled species, which account for
more than 80% of the total commercial fishery revenues in the region. We account for species’
movements in and out of the Bay, which allows us to estimate the total benefits to consumers in the Bay
and along the remainder of the U.S. Atlantic coast. In our benchmark model, we assume that the
fisheries are regulated to protect the biological sustainability of the exploited species, but that fishing
effort is not fully controlled so harvester profits are dissipated in equilibrium. We also consider two
alternative scenarios in which the affected fisheries are managed to maximize 1) producer surplus, and
2) producer + consumer surplus.
The three main research questions we address in this paper are: How large are the economic
benefits of water quality improvements in the Chesapeake Bay? What fraction of benefits are due to
spatial spillovers to areas where water quality is not improved? How are the magnitude and spatial
distribution of these benefits influenced by the nature of the management regime in the affected
fisheries?

Structural Behavioral Models for Rights-Based Fisheries

Matthew Reimer
,
University of Alaska-Anchorage
Joshua Abbott
,
Arizona State University
Alan Haynie
,
NOAA Fisheries

Abstract

Despite the successes of rights-based management (RBM) reforms, such as catch
shares, significant in-season externalities remain unaddressed in many fisheries. As a
result, managers may use a wide range of tools—including input restrictions, protected
areas, and time-area closures—in addition to RBM systems to address such concerns.
Economists have a long tradition of informing managers of the potential consequences of
these actions by developing positive bioeconomic models that predict how changes to
policy design may induce economic and/or ecological impacts. The continued adoption
of RBM, however, presents a fundamental challenge to fisheries policy modeling: the
current range of economic models in fisheries have been specified and calibrated under
conditions of non-RBM institutions, such as regulated open or limited access. As such,
these models do not capture the theoretical mechanisms by which incentives under RBM
affect fishers' in-season behavior, with the result that their predictions could be
misleading.
In this paper, we develop an empirical structural model of spatiotemporal fisher behavior
with tradable catch shares. Our estimation strategy tractably incorporates dynamic
aspects of catch-quota balancing within a fishing season by integrating a rational
expectations model of quota lease prices with a RUM model of fishers’ allocation of their
effort over space and time. We estimate it using a nested fixed-point maximum likelihood
approach. We illustrate our modeling approach through a Monte Carlo analysis and
demonstrate that it has superior predictive capabilities compared to conventional models,
particularly for predicting out of sample for historically unobserved policies. We then
estimate our model using data from the Bering Sea mixed-species groundfish fishery and
show how it can be used to examine the effects of common policies such as changes in
quota allocations or marine protected areas.

How and When to Measure Renewable Resources under State Uncertainty

David Kling
,
Oregon State University
Paul Fackler
,
North Carolina State University
Michael Springborn
,
University of California-Davis

Abstract

Natural resource management involves acquiring and using information about the stock being managed. Assessment of available stocks is subject to multiple forms of uncertainty, even when budgetary and technical resources are available. Here the focus is on uncertainty in the level of population of a harvested species. We allow for learning to reduce uncertainty where information may be generated through resource use as well as assessment independent of resource use. From an economic perspective, investment in stock assessment should be weighed against its expected benefit in terms of improved management performance. The manager chooses the level of resource use and independent assessment in order to maximize the expected net present value of rents. In the process, the manager takes into account the value of information in the form of more precise stock level estimates. We find that the dynamics of learning and opportunities for policy experimentation in our model differ substantially from simpler cases where information involving harvesting data is unused and in which independent assessments are always available at no cost. Our model provides insight into the economic value generated by different levels of investment in learning, in particular the return on investment in information. We illustrate the model with a numerical example of the joint harvest and stock assessment problem in fisheries.

Regulating Biological Resources: Lessons from Marine Fisheries in the United States

Eyal Frank
,
University of Chicago
Kimberly Oremus
,
University of Delaware

Abstract

Managing renewable resources requires making decisions based on noisy data. Despite the uncertainty of resource management, it is still important to assess the efficacy of such policies. In this paper, we examine the Magnuson-Stevens Fisheries Conservation and Management Act (MSA), which is internationally regarded as a gold standard in sustainable fishery management. In event-study designs, we find that implementing the conservation requirement to rebuild stocks, biomass increases by over 25%, and catch decreases by about 45%. We document large heterogeneity across stocks, and compare it with commonly used trend-break models in the literature. We proceed to use the thresholds that necessitate rebuilding plans to investigate whether these effects can be interpreted as causal treatment effects of the MSA. Comparing the same stocks that meet the condition for a rebuilding plan in two time periods, before and after these plans were required, allows us to construct plausible approximations for the counterfactual biomass that stocks would have experienced in the absence of the rebuilding policy. We find that stocks more than double in their biomass relative to these counterfactuals, following the establishment of the rebuilding requirements in the MSA. Even as we explore alternative confounders to these effects, such as changes in demand, environmental conditions, and technology, our interpretation of the results holds.
Discussant(s)
Kevin Berry
,
University of Alaska-Anchorage
Ling Huang
,
University of Connecticut
Derek Lemoine
,
University of Arizona
Kailin Kroetz
,
Resources for the Future
JEL Classifications
  • Q2 - Renewable Resources and Conservation
  • D8 - Information, Knowledge, and Uncertainty