Posts Tagged ‘Fisheries Economics’

Estimating Endangered Species Interaction Risk with the Kalman Filter

March 22, 2014

Crossposting from the Reconhub:

AJAETogether with my co-author Stephen Stohs, I recently published an article in the American Journal of Agricultural Economics. The main gist is that with rare events like endangered species interactions, the statistical information in yearly data sets is limited, and that data from several years provide better information for decision making. We provide a method that is based on the Kalman filter and that allow for observations unequally spaced  in time. The method also takes account of spatiotemporal effects. We discuss the particular case of leatherback turtle bycatch in a gillnet fishery in California and Oregon. The leatherback is an endangered species, and in order to reduce bycatch, extensive spatiotemporal closures was imposed on the fishery in 2000. Our analysis shows that the interaction risk likely was smaller than in the scenarios that motivated the closures. To discuss whether the closures were and are warranted, require further analysis, however. As we discuss in the concluding section, closures in California may lead to trade leakages such that the total effect on the leatherback turtle stock is unknown. And the value of the leatherback in the ecosystem, and the value of its mere existence, is unknown.

The abstract:

To address the tradeoff between biodiversity conservation in marine ecosystems and fishing opportunity, it is important to quantify the risk of endangered species interactions in commercial fisheries. We propose a Kalman filter suitable for rare events to estimate the endangered leatherback turtle take risk in the California drift gillnet fishery in the years 1990–2010, conditional on spatiotemporal factors that affect take rates. Results suggest interaction risk has remained stable, but with substantial variation over the spatiotemporal distribution of effort. Our methods might also apply to recreation demand analysis with rare event risk, or to applications involving irregularly spaced observations, like trade-level stock market data.

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Seminar at Berkeley

May 1, 2013

Today, I will present the project Ecosystem-Based Fisheries Management in the Barents Sea in the Environmental and Resource Economics seminar at the Department of Agricultural and Resource Economics at UC Berkeley. The abstract:

While bioeconomic analysis has advanced to where high-level ecosystem management is technically possible in terms of multidimensional, stochastic optimization, the sentiment that the underlying, biological models are of limited interest is omnipresent. The existing models cannot capture the observed ecosystem or foodweb dynamics. For viable optimization schemes to apply, models have been, and will have to be, relatively simple when compared to population dynamics models. There exist a crucial tradeoff between biological detail and stylized simplicity. Biologically detailed models have been promoted by biologists who want their models to replicate what they observe in nature, while stylized simplicity has been promoted by resource economists who want to analyze economic decisions. We aim to narrow the gap and cheapen the tradeoff. We develop a bioeconomic model of the ecosystem in the Barents Sea. The model is fitted with data assimilation methods and captures the observed dynamics in the ecosystem and the economy. Using stochastic optimization, we study numerical solutions of the model. Optimal, non-concave harvest profiles underline the importance of the ecosystem approach. In the extension of our project, we will study how solutions from our top-down, optimization approach perform in a high-dimensional, bottom-up, simulation approach.

The project is interdisciplinary and finds itself where paths (or trails, really) from economics, biology, ecology, applied mathematics, and statistics meet. Thus, it is at the outskirts of all those disciplines. It is a rather dark place. It remains to be seen whether we can shed some light around. But enough of the Nordic realism.

I find it difficult to present papers from the project because they belong in a setting which cannot be taken light upon. My presentation will therefor span at least two papers, with focus on how to build a biological model for ecosystem-based management which lends itself to subsequent bioeconomic analysis. To drive home the importance of getting the biology right, I will also discuss how we proceed with the bioeconomic analysis.

Ecosystem2

Picture credits: Philip Steven, http://www.imr.no.

 

 

Fisheries Management Under Irreversible Investment: Does Stochasticity Matter?

April 7, 2013

In the latest issue of Marine Resource Economics (vol. 28, no. 1) I co-author an article together with colleagues at the Norwegian School of Economics. We explore what optimal management looks like when capital has to be managed as well as the fish stock. In fisheries, fleet investments are to some degree irreversible; fishing boats has little alternative use. While little has been written on the multidimensional decision problem of how large a fleet to own (the capital decision) and how much of it to use (the fishing decision), we also look at the effect of stochasticity. Things quickly become messy in these models as the number of potential scenarios is large. While it is manageable in our present case, I do not look forward to seeing further extensions. Or rather, I would love to see creative takes on analysis and presentations of high dimensional problems.

MREOur abstract:

We present a continuous, nonlinear, stochastic, and dynamic model for capital investment in the exploitation of a renewable resource. Both the resource stock and capital are treated as state variables. The resource owner controls fishing effort and the investment rate in an optimal way. Biological stock growth and the capital depreciation rate are stochastic in the model. We find that the stochastic resource should be managed conservatively. The capital utilization rate is found to be a nonincreasing function of stochasticity. Investment could be either higher or lower depending on the interaction between capital and the resource stock. In general, a stochastic capital depreciation rate has no strong influence on optimal management. In the long run, the optimal harvest for a stochastic resource becomes lower than the deterministic level.

An Overview of Empirical Analysis of Behavior of Fishermen Facing New Regulations

December 17, 2012

Some time ago, I published a review article in Environmental Economics (2012, volume 3, issue 2). It is based on a lecture I gave as part of my dissertation defence in 2010, and the title is derived from the topic I was given for the lecture. When I prepared my lecture, I wrote up my notes in article format. Later, I spent some time polishing and preparing the article for submission. Oddities intervened, and the submission was put on hold for a substantial amount of time. But, I came out in the end, and I am happy about it. Here is the abstract:

Environmental EconomicsThis paper reviews the empirical literature on fishermen’s behavior under changing regulations. The review is not exhaustive; instead, the work focuses on the historical development of empirics in fisheries economics and the parallel development of fisheries regulations. While historic parallels are difficult to observe for later developments, recent empirical analysis of fishermen’s behavior illustrates the breadth and interdisciplinary nature of current empirical fisheries economic research. It merges biology, economics, and social science with statistical, mathematical, and rhetorical methods. The author hopes to capture some of the interdisciplinary interplay in the review.

IIFET 2010

August 18, 2010

I attended IIFET 2010 in Montpellier, France, this summer. I had a great time, meeting colleagues from around the world. IIFET stands for the International Institute of Fisheries Economics and Trade and organises biennial conferences. I’ve been to a couple of conferences, but never to an all-fisheries one; it was a pleasing experience (I’m a fisheries guy).

In addition to the social/network aspect of going to conferences (which is, perhaps, 50% of my motivation to attend conferences), I appreciate the plenary sessions. I observe that many conference participants skip the plenary sessions, but I cannot understand why. The conference organizers have, probably in most cases, tried tried their best to get the best and most interesting plenary speakers. Most times, invited keynote speakers have important and interesting things to tell you (it cannot be everyday they have the attention of an entire research field, and if they realize, they will struggle to make their talk matter). A missed plenary is a missed oportunity to learn from and listen to someone important who has something important to say.

One of the plenary speakers at IIFET 2010 was Anthony Scott, Professor Emeritus at the University of British Columbia, 87 years old, and a living legend in fisheries economics.* In his talk, he applied Thomas Kuhn’s ideas about scientific revolutions to fisheries economics. Truly amazing. Not only the idea itself, which seem obvious once it is formulated but still requires a wide perspective and intimate and detailed knowledge of the whole field to be formulated, but also that he remains relevant and contributes 55 years down the road. I just hope someone is responsible enough to make sure that paper gets published in one form or another.

The other speaker in the same plenary session was the IIFET 2010 Distinguished Service Award winner Susan Hanna. (Anthony Scott was given the IIFET Fellow Award, by the way.) Her talk was another plenary I wouldn’t have missed. She critisized how the current practice (meaning everything from publishing and hiring practices down to choice of words and metaphors) in fisheries economics, and in much of economics for that matter, failed to fulfill the ideal of any research activity; to be relevant in the real world, to inform policy, and to educate the public. I just hope everyone listened really carefully.

UPDATE: As Ann Shriver, IIFET’s Executive Director, writes in the comments, Susan Hanna’s presentation is available at the IIFET home page. It gets really interesting from slide 10 and onwards. Ann Shriver also confirms that both Scott’s and Hanna’s papers will be published.

* In 1955, Scott published the influental and cornerstone-article ‘The Fishery: The Objectives of Sole Ownership’ in the Journal of Political Economy. From a (fairly) recent praise-speak:

In present day fisheries economics, we accept [Scott’s] 1955 conclusions without question […] So, we can argue that [the] 1955 article provided the foundation for present day fisheries economics. It was, in fact, an article well ahead of its time.

Legendary status is further confirmed by the Anthony Scott fonds in  the UBC Archives; a collection of all his letters, reports, lecture notes, and even desktop diaries(!), no less than 7.15 meters of ‘textual materials.’

Fisheries Classics: The Pacific Salmon Fisheries

May 18, 2010

A while ago, I had the opportunity to read Crutchfield and Pontecorvo’s book on the Pacific salmon fisheries. The Pacific Salmon Fisheries, published in 1969 and subtitled A Study of Irrational Conservation, was an early contribution to the empirical literature on fisheries economics. The subtitle clearly signalled Crutchfield and Pontecorvo’s opinion on both the current and historic regulations of the fisheries. Perhaps the status as a ‘classic’ can be debated; notwithstanding, its scope and ambition is nothing but impressive: The Pacific Salmon Fisheries discusses theory, describes the various salmon fisheries along the North-American Pacific coast; the gear, the environment, the regulations, and their histories, it discusses the different fisheries potential and performance, and finally alternative regulations.

My favorite part of the book is the illustrations of overfishing and overcapitalization in both the Alaskan and Puget Sound fisheries. In particular, Figures 9 and 10 on pages 58 and 59 highlight the problems in the Alaskan fisheries:

From the figures, it is clear that in the period 1930’s to 1960’s, while total catch went down (top curves in both panels), average catch per fishermen went down (left, middle curve), total number of fishermen went up (bottom, left curve), and gear use (middle and bottom, right curves) went up: More men with more gear catching less fish. Two simple pictures illustrating the fundamental fisheries problem: The Tragedy of the Commons. Why did this happen? After all, the Alaskan fisheries were old fisheries already in the 1930’s and assumed to be in rent-dissipated equilibria. It turns out, however, that prices of salmon increased steadily throughout the period (see Figure 8, p. 57).

An interesting and amusing thing about the figures in The Pacific Salmon Fisheries are that they are handdrawn and, for the most part and of unknown reasons, not on a linear scale. Perhaps there was an agenda involved?

Crutchfield and Pontecorvo’s analysis of the fisheries in the Puget Sound did not produce any happier conclusions. They wrote:

As long as the present situation continues, there can be no real hope of economic health in the fishery. Any increase in relative prices of salmon is promptly swallowed up by increased entry, rising costs, and more stringent pressure on the physical resource and those charged with its management. It simply leads to a new equilibrium, no more satisfactory than the previous one, with a net loss to the economy as a whole as more factors of production are trapped in the fishery (p. 196).

To me, The Pacific Salmon Fisheries represents the first, truly convincing evidence of overcapitalization in fisheries and is certainly a classic all fisheries economists should be familiar with.

Related posts:

Fisheries Classics: The Tragedy of the Commons

April 13, 2010

Garret Hardin’s 1968 article in Science, The Tragedy of the Commons is for sure a classical piece in the fisheries economics literature and has become the most popular description of the commons problem; fisheries problems are usually regarded as a special case. The passage where Hardin describes the tragedy is perhaps the most famous:

Garret Hardin (1915 - 2003)

Therein is the tragedy. Each man is locked into a system that compels him to increase his [input] without limit – in a world that is limited. Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons (Hardin, 1968, p. 1244).

Hardin has had an enormous influence, perhaps particularly in the sciences. It has been suggested (by notable persons as Jim Wilen and Elinor Ostrom) that Hardin’s choice of metaphor (the tragedy, where helpless individuals are lead to destruction in an inexorable process) has been unfortunate; Wilen, for example, has written that modern fisheries management systems are founded on a perception of tragedy.

Related post:

Fisheries Classics: The Common Wealth in Ocean Fisheries

April 8, 2010

In this series, I will post bits and pieces from, and perhaps comments to, various classical texts in fisheries economics. I’ll begin with the very first paragraph of The Common Wealth in Ocean Fisheries by Christy and Scott (1965). The Common Wealth is perhaps not a dominant landmark in the fisheries literature, but Christy and Scott were indeed to very influental characters in the early development of fisheries economics, and their book helped introduce fisheries problems to social scientists.

The biological resources of the sea have long fascinated man. The mystery of what lies beneath the surface has stimulated his imagination and nurtured hope that in this vast area there are resources capable of feeding a growing and a still hungry population for centuries to come. But, at the same time, realization of this hope is impeded by the opacity, instability, and sheer magnitude of the medium itself – by man’s inability to see and hold. Fishing – one of man’s earliest callings – is still haphazard and subject to the vagaries of weather, ocean currents, and mysterious migrations (p. v).

Rebuilding Global Fisheries

September 15, 2009

Boris Worm, Ray Hilborn, and, among others, Chris Costello, recently had the article ‘Rebuilding Global Fisheries’ in Science (Vol 325, pp. 578 – 585). It discusses trends in the rebuilding of fisheries and marine ecosystems. The inherent problem in fisheries is the tragedy of the commons; many fisheries are poorly managed and access rights are not distributed properly. ‘Rebuilding Global Fisheries’ touches upon it in the introduction:

[…] progress toward curbing overfishing has been hindered by an unwillingness or inability to bear the short-term social and economic costs of reducing fishing [p. 578].

And again, while discussing species collapse:

Rebuilding […] collapsed stocks may require trading off short-term yields for conservation benefits [p. 581].

Short-term costs are like an investment in future abundacy; if fishermen are uncertain whether the promised future will enrich themselves, they will probably avoid the investment if they can. Accordingly, Worm et al. list access rights and economic incentives among tools for rebuilding fisheries:

Assingning dedicated access privileges, such as catch shares or territorial fishing rights, to individual fishers or fishing communities has often provided economic incentives to reduce effort and exploitation rate […] Realigning economic incentives with resource conservation (rather than overexploitation) is increasingly recognized as a critical component of successful rebuilding efforts [p. 583].

Another problem for many fisheries is simply that they are located in the developing world:

On a global scale, a key problem for rebuilding is the movement of fishing effort from industrialized countries to the developing world […] This north-south redistribution of fisheries has been accelerating since the 1960s […] and could in part be a perverse side effect of efforts to restore depleted fisheries in the developed world, as some fishing effort is displaced to countries with weaker laws and enforcement capacity [p. 584].

Collapsed fisheries in the developed world, like the Canadian Northern Cod scandal, are also a likely source of effort movements to the developing world. Further, the technological ability to fish far from, and even independent of, (home) port, poorly regulated fisheries, limited enforcement of regulations, corrupted, political systems, and lack of knowledge are all probable reasons for the sorry state of many fisheries in the developing world. Also, many fisheries in the developing world are small-scale, artisanal fisheries and such fisheries cannot be managed in the same way as industrial fisheries (p. 582).

Finally, Worm et al. discusses open questions in relation to the rebuilding of fisheries. One I found interesting (I’m doing related research) relates to by-catch problems of vulnerable, and, one might add, endangered species:

[An area] of inquiry relates to the question of how to avoid contentious trade-offs betweeen allowable catch and the conservation of vulnerable or collapsed species. Recovering these species while maintaing global catches may be possible through  improved gear technology and a much more widespread use of ocean zoning into areas that are managed for fisheries benefits and others managed for species and habitat conservation. Designing appropriate incentive for fishers to avoid the catch of threatened species, for example, through tradable catch and by-catch quotas has yielded good results in some regions [p. 584].

In conclusion, Worm et al. has a grand view for fisheries science:

We envision a seascape where the rebuilding, conservation, and sustainable use of marine resources becomes unifying themes for science, management, and society. We caution that the road to recovery is not always simple and not without short-term costs. Yet it remains our only option for insuring fisheries and marine ecosystems against further depletion and collapse [p. 584].

Maybe the most important message I take home from ‘Rebuilding Global Fisheries’ is the crucial role the economist must play in order to make conservation and rebuilding strategies work; incentives matter and are very important. The same message, by the way, is made by Gardner Brown & Jason Shogren  in relation to the Endangered Species Act (I’ve posted excerpts from their article here).

Hat-tip: Legal Planet

Sustainable Fisheries

April 17, 2009

In Nature (volume 455, no. 23)  Geoffrey Heal and Wolfram Schlenker discusses individual transferable quotas (ITQs) and their potential to improve the health of both fish stocks and fisheries. They show empirically how ITQs have increased catches in 121 fisheries around the world. From their final discussion:

If ITQs work, why haven’t they been more widely used? Undoubtedly, this is partly because, until [recent research], we have not had unambiguous evidence that they do work. This study should give ITQ implementation a boost. But there are also some political, ideological and regulatory issues in the way. Some environmental groups are opposed to anything based on market principles. Others feel that ocean fisheries are common property that everyone should be free to use them, and that it is wrong to establish ownership rights in the sea. It is to be hoped that clear evidence of the effectiveness of ITQs will lead their opponents to think again. Finally, ITQs work best when a fish species resides exclusively within the waters of a particular country. Fish species in international waters, or migratory species, would require international agreements, with the complication that individual might have an incentive to cheat.

Another problematic issue with ITQs that Messrs. Heal and Schlenker don’t discuss is how they change the distribution of income from a fishery. In a functioning market (which ITQs require to work properly), implementation of ITQs transfer all future income from a fishery to the quota holders at the time of implementation. Some people suggest that when ITQs were implemented on Iceland, a lot of fishermen got a lot of money they did not know what to spend on and that at least some of that money went into building the Icelandic financial adventure that eventually collapsed.

Fisheries Economics, a Useless Science?

April 14, 2009

I came across this paper out there on the world wide web; it’s written by Wim Davidse. Here’s the abstract:

The paper questions the usefulness of fisheries economics, following some statements that express the uselessness of business economics in a leading Dutch journal on this discipline. These statements are:

The contribution to practice is very limited. Solutions are implemented in practice without consulting theories;

Theoretical assumptions use to be far from practice. Expressing utilities in monetary values will only partly explain the behaviour of entrepreneurs.

Theoretical outcomes are self-evident or only explain in retrospect rationality of business decisions.

Theories only need to satisfy our need for knowledge and are as such a kind of ‘l’art pour l’art’.

The paper applies these four observations to fisheries economics and gives some examples in this discipline. In a more positive way the specific contribution of fisheries economics to fisheries management and to business practice is investigated. Finally, some recommendations are formulated.

Jumping to the conclusions:

[F]isheries economics is nota as useless as business economics […] since there have been clear contributions to the practice of fisheries management. […] Answering the question in the title of this contribution I will say that fisheries economics is a useful science in combination with other sciences and with practical knowledge.

Phew!

World Fish Production

March 4, 2009

Since I’m into fisheries economics, I found this chart from The Economist interesting. World fish production was 143.6 million tonnes in 2006, the highest ever recorded. Something doesn’t add up, however. According to the accompanying story, the wild fish catch levels off while the farmed portion of fish eaten by people is 47% and assumed to increase. The graph shows that farmed fish is leveling off. Also, they write that the catch in 2006 was 92 million tonnes, which obviously corresponds to the blue part of the 2006 column; they switched the colors of the columns.

Some of the comments to the story are interesting too. Derek L, for example, writes:

We’re all in this. There is no use blaming the Asians, the Norwegians, or the Spanish. Sure they happen to be the three biggest offenders, but anyone who buys anything but line caught wild fish should be slapped hard upside the dead for every purchase.

Not surprisingly, he’s a vegetarian. While I agree that industrial methods in fishing has problems, I also think that there are solutions and that we need to pursue them. Managed appropriately, I believe fish can help alleviate some of the problems presented by a growing population and declining biodiversity.

World Fish Production

UPDATE: If you’re interested in a fuller picture of world fish production in a longer time perspective, check out my follow up posts: