efficiency of catch and effort quotas in the presence of risk abstract a general bioeconomic model is constructed to analyze the efficiency of different methods of fisheries management when there are some risks involved the model includes the biological dynamics of the fish stock and allows that environmental factors cause stochastic variations in the growth of the fish stock and in the cpue the paper develops a method for comparing the efficiency of control variables in stochastic dynamic programming problems and applies it to the case of management of fisheries with catch and effort quotas sufficient conditions are derived for the superiority of each of the two management methods these conditions are used to decide the relative efficiency of these two management methods in simple models it is shown that the relative efficiency of the two management methods depends on the importance of the stochastic variations in the growth of the fish stock relative to that in the cpue and on the elasticity of demand it also matters if the objective of the management is to maximize profits or maximize welfare

the impact of age structure uncertainty and asymmetric spatial dynamics on regulatory performance in a fishery metapopulation failure to manage the harvest of a metapopulation at its underlying ecological scale can lead to extirpation of discrete subpopulations and reduce productivity however it may be difficult and costly to assess and manage stocks at a finer spatial scale and there is generally greater uncertainty about the size of substocks than about the aggregate stock we use a two patch age structured metapopulation model to compare the performance of global vs area specific total allowable catch constraints tacs the relative performance of these approaches in terms of profits and risk of depleting subpopulations depends upon biological technical and economic parameters in particular various kinds of uncertainty aggregation of fish stocks and the spatial dynamics of different age classes surprisingly a global tac is less risky when there is little mixing of the subpopulations as long as target mortality rates are not set too high the advantage of the global tac is reduced when there is mixing and migration between the subpopulations particularly when these dynamics are asymmetric however a regulator naive to the nature of the true spatial dynamics and hence the spatially optimal target fishing mortality rates may still be better off employing a global tac

the inverted pyramid a neo ricardian view on the economy environment relationship abstract in ecological economics natural resources which may contribute only a small amount to gdp are viewed as fundamental to the functioning of the economy they are sometimes pictured as sitting at the base of an inverted pyramid with the rest of the economy balanced on top of them in this paper we show that when prices are set by markup a standard heterodox assumption then the inverted pyramid picture of the economy emerges naturally in a neo ricardian model we demonstrate the use of the model with brief applications to biophysical economics the paper is one of a growing number that use heterodox macroeconomics to address questions in ecological economics

the choice of regulatory instrument when there is uncertainty about compliance with fisheries regulations noncompliance is an important problem for fisheries regulators and a number of studies have considered optimal enforcement issues within fisheries regulation our article extends this literature by studying the implications of noncompliance for the choice between tax and quota regulation we first develop a general stock recruitment model of a search fishery with illegal landings and show that compliance uncertainty where the regulator is uncertain about the extent of noncompliance generates an efficiency advantage for taxes over individual transferable quotas we also provide evidence that uncertainty about compliance is an important source of uncertainty for regulators copyright 2008 oxford university press

regulating stock externalities under uncertainty abstract using a simple analytical model incorporating benefits of a stock costs of adjusting the stock and uncertainty in costs we uncover several important principles governing the choice of price based policies e g taxes relative to quantity based policies e g tradable permits for controlling stock externalities as in weitzman rev econom stud 41 4 1974 477 the relative slopes of the marginal benefits and costs of controlling the externality continue to be critical determinants of the efficiency of prices relative to quantities with flatter marginal benefits and steeper marginal costs favoring prices but some important adjustments for dynamic effects are necessary including correlation of cost shocks across time discounting stock decay and the rate of benefits growth applied to the problem of greenhouse gases and climate change we find that a price based instrument generates several times the expected net benefits of a quantity instrument

stochastic production and heterogeneous risk preferences commercial fishers gear choices we present a model of fishers gear choice which allows for heterogeneity both in production technology and risk preferences and apply it on a panel of swedish trawlers stochastic revenue functions are estimated and used to predict the mean and standard deviation of revenue for each trip in a random parameters logit model we test if these predicted values explain gear choice a majority of fishers respond positively to increased mean and negatively to increased variability of expected landing values indicating risk aversion but also show a strong tendency to choose the same gear used on the previous trip

amalgamations of universities are there economics of scale or scope this paper estimates a multiple output cost function for australian universities the estimates are used to evaluate the cost savings arising from the amalgamation of two or more institutions thes

land use dynamics and the environment we build a benchmark framework to study optimal land use encompassing land use activities and environmental degradation we focus on the spatial externalities of land use as drivers of spatial patterns even if land is immobile by nature location s actions affect the whole space through pollution which flows across locations resulting in both local and global damages in contrast to the previous literature on spatial dynamics we prove that the social optimum problem is well posed i e the solution exists and is unique taking advantage of this result we illustrate the richness of our model by means of a numerical analysis considering a global dynamic algorithm we find that our model reproduces a great variety of spatial patterns related to the interaction between land use activities and the environment in particular we identify the central role of abatement technology as pollution stabilizer allowing the economy to achieve stable steady states that are spatially heterogeneous

buyback subsidies the time consistency problem and the itq alternative this paper deals with the time consistency problem associated with buyback schemes arising from the fact that the schemes may be anticipated by vessel owners after reviewing and elaborating upon the key results of our recently published article on buybacks and limited entry programs we discuss the consequences of combining buybacks with itq schemes or the equivalent instead of limited entry programs we conclude that substituting itq schemes for limited entry programs cannot be relied upon to eliminate fully the time consistency problem we suggest that what may be required is a management program that combines rights based schemes with taxes

minimum information management in fisheries this paper deals with problems of optimal management of common property fisheries it advances the proposition that many fisheries management schemes which are theoretically capable of generating efficiency are actually not practicable owing to their huge informational requirements this applies for instance to management by means of corrective taxes subsidies the paper proceeds to show that there exists under fairly unrestrictive conditions market based management systems that require minimal information for their operation but lead nevertheless to efficiency in common property fisheries one such system is the individual transferable share quota system

harvest reporting timely information and incentives for technology adoption natural resource managers typically adopt precautionary quota buffers to account for scientific and management uncertainty such buffers ensure compliance with harvest targets up to a confidence level set by the manager but represent foregone profits and create incentives for firms voluntary investment in the provision of information that lessens the regulator s uncertainty this paper characterizes conditions under which the fishing industry would willingly upgrade its reporting technology to provide accurate and timely catch data wireless technologies currently available to harvesters make the provision of real time information feasible and affordable industry s incentives critically depend on the manager s expected choice of effort restrictions under the alternative technologies upgrading is attractive if the new distribution of reporting error shifts probability mass away from large errors so that the quantile at the confidence level is reduced first order stochastic dominance by the distribution under the baseline technology is a sufficient condition evidence from the maryland blue crab accountability pilot program an industry led initiative that tested the feasibility of adopting e logbooks illustrates the results real time availability of accurate catch information under electronic reporting would translate into in season adjustments of the manager s controls that could increase the industry s total harvest

renewable resource harvesting under correlated biological and economic uncertainties implications for optimal and second best management biologists have long recognized environmental disturbances impact both the growth of renewable resources and the efficiency of harvest effort however models of renewable resource management under uncertainty have commonly assumed economic and biological uncertainties to be uncorrelated we present examples of valuable fish species that experience correlated variation in biological growth and catchability in response to a common environmental disturbance building correlation into a model of renewable resource management under uncertainty we find correlation to alter the optimal response by managers to cost disturbances and impact the value of retaining intra period flexibility over harvest targets examining the performance of three harvest control mechanisms harvest quotas effort quotas and taxes reveals that positive correlation between costs and growth favors harvest quotas over effort quotas and effort quotas over taxes and vice versa the model is then applied numerically to the pacific bigeye tuna fishery which experiences positively correlated shocks driven by the el nino southern oscillation correlation qualitatively changes the optimal response to a cost shock and harvest quotas are found to be strongly favored over both effort quotas and taxes

endogenous fishery management in a stochastic model why do fishery agencies use tacs along with fishing periods this paper seeks to explain the circumstances under which using total allowable catch tac as an instrument to manage a fishery along with fishing periods may be of interest from a regulatory point of view the deterministic analysis by homans and wilen j environ econ manag 32 1 21 1997 and anderson ann oper res 94 231 257 2000 is thus extended to a stochastic scenario where the resource cannot be measured accurately the resulting model is solved numerically to find the optimal control rules in the iberian sardine stock three relevant conclusions can be highlighted from simulations first the greater the uncertainty regarding the state of the stock the lower the probability of the fishery being closed before the end of the fishing period second the use of tacs as a management instrument in fisheries that are already regulated by fishing periods leads to i an increase in the optimal season length and harvests especially for medium and high numbers of licences ii improved biological and economic variables when the fleet is large and iii extinction risk for the resource being eliminated third the regulator would rather select the number of licences than restrict the season length

risk and sustainability assessing fishery management strategies we develop a theoretical framework to assess the sustainability of fishery management strategies when the bioeconomic dynamics are marked by uncertainty and several conflicting objectives have to be accounted for stochastic viability ranks management strategies according to their probability to sustain economic and ecological outcomes over time the approach is extended to build stochastic sustainable production possibility frontiers representing the trade offs between sustainability objectives at any risk level given the current state of the fishery this framework is applied to a chilean fishery faced with el nino uncertainty we study the viability of effort and quota strategies when catch and biomass levels have to be sustained we show that 1 for these sustainability objectives whatever the level of the outcomes to be sustained quota based management results in a better viability probability than effort based management and 2 the fishery s historical quota levels were not sustainable given the stock levels in the early 2000s

the problem of the commons still unsettled after 100 years the problem of the commons is more important to our lives and thus more central to economics than a century ago when katharine coman led off the first issue of the american economic review as the us and other economies have grown the carrying capacity of the planet in regard to natural resources and environmental quality has become a greater concern particularly for commonproperty and open access resources the focus of this article is on some important unsettled problems of the commons within the realm of natural resources there are special challenges associated with renewable resources which are frequently characterized by open access an important example is the degradation of openaccess fisheries critical commons problems are also associated with environmental quality a key contribution of economics has been the development of market based approaches to environmental protection these instruments are key to addressing the ultimate commons problem of the twenty first century global climate change jel q15 q21 q22 q25 q54

assessing the relative merits of development charges and transferable development rights in an uncertain world traditionally regulatory instruments have been used to achieve planning objectives however emerging market based policy instruments such as transferable development rights a quantity based app

does the optimal size of a fish stock increase with environmental uncertainties we analyze the effect of environmental uncertainties on optimal fishery management in a bio economic fishery model unlike most of the literature on resource economics but in line with ecological models we allow the different biological processes of survival and recruitment to be affected differently by environmental uncertainties we show that the overall effect of uncertainty on the optimal size of a fish stock is ambiguous depending on the prudence of the value function for the case of a risk neutral fishery manager the overall effect depends on the relative magnitude of two opposing effects the convex cost effect and the gambling effect we apply the analysis to the baltic cod and the north sea herring fisheries concluding that for risk neutral agents the net effect of environmental uncertainties on the optimal size of these fish stocks is negative albeit small in absolute value under risk aversion the effect on optimal stock size is positive for sufficiently high coefficients of constant relative risk aversion

optimal harvesting of stochastic spatial resources abstract we characterize the optimal harvest of a renewable resource in a generalized stochastic spatially explicit model despite the complexity of the model we are able to obtain sharp analytical results we find that the optimal harvest rule in general depends upon dispersal patterns of the resource across space and only in special circumstances do we find a modified golden rule of growth that is independent of dispersal patterns we also find that the optimal harvest rule may include closure of some areas to harvest either on a temporary or permanent basis biological reserves reserves alone cannot correct open access but may under sufficient spatial heterogeneity and connectivity increase profits if appropriate harvest controls are in place outside of reserves

the tragedy of the commons in a fishery when relative performance matters this paper presents a simple model of a common access fishery where fishermen care about relative performance as well as absolute profits our model captures the idea that status which depends on relative performance in a community influences a person s well being in our main specification relative performance depends on the absolute difference in after tax profits we show that overharvesting resulting from the tragedy of the commons problem is exacerbated by the desire for higher relative performance leading to a smaller steady state fish stock and smaller steady state profit for all the fishermen we also consider alternative specifications where status depends on the absolute difference in harvests or relative difference in profits or where there is heterogeneity in the degree to which status matters or allowing for the possibility of extinction in all these specifications status further reduces the steady state fish stock we examine taxes and an individual quota as policy alternatives and find support for using the direct quantity method to implement the socially efficient stock level

materials capital direct indirect substitution and mass balance production functions a foundation is provided for a correct and accurate analysis of the relationship between monetary values and physical dimensions in economic production a distinction is proposed between direct and indirect substitution linked to this a classification is offered of various types of substitutability and complementarity relationships between production factors it is argued that the neoclassical production function may be consistent with mass balance but is unsuitable for a detailed and accurate understanding of changes in production that influence materials use for this purpose general production functions satisfying mass balance are formulated drawing upon the proposed classifications

managing partially protected resources under uncertainty it is common wisdom that open access leads to the inefficient use of resources and private ownership of resources improves efficiency however the impact of enclosure and efficient management of some resource pools on other open access resource pools is poorly recognized the problem is common to many congestion prone facilities including roads parks fisheries antibiotics grazing lands and wilderness areas in this paper we analyze the optimality of price and quantity instruments in regulating resource use when there is uncertainty about congestion costs price instruments are found to be preferable to quantity instruments and strictly so when demand is less than perfectly elastic we also explore the effect of market power by resource owners on the relative efficiency of the two instruments

on uncertain renewable resource stocks optimal harvest policies and the value of stock surveys abstract annual harvest quotas are commonly employed in the management of renewable resource stocks commercial fisheries being a prime example such resource stocks often undergo quite significant natural fluctuations to which quotas must be adapted a further complication arises from the fact that estimates of stock abundance are often highly uncertain in this paper a bayesian approach is used to model optimal quota decisions for an uncertain fluctuating renewable resource stock

public benefits private benefits and policy mechanism choice for land use change for environmental benefits the choice of policy mechanisms for encouraging environmentally beneficial land use change should depend on the relative levels of private or internal net benefits and public or external net benefits a map of recommended policy mechanisms is developed depending on the relative levels of these variables positive incentives negative incentives and extension need to be targeted carefully to appropriate projects where private net benefits are closer to zero and or public net benefits are more extremely positive or negative technology development is suggested where private net costs outweigh public net benefits no action is recommended for many potential projects

partial enclosure of the commons abstract we examine the efficiency distributional and environmental consequences of assigning spatial property rights to part of a spatially connected natural resource while the remainder is competed for by an open access fringe we refer to this as partial enclosure of the commons we obtain sharp analytical results regarding partial enclosure of the commons including 1 while second best it typically improves welfare relative to no property rights 2 all resource users can be made better off 3 positive rents arise in the open access area and 4 the resource maintains higher stocks under spatial heterogeneity we also characterize spatial regions that are ideal candidates for partial enclosure typically society should seek to enclose those patches with high environmental productivity and high self retention but whether high economic productivity promotes or relegates a patch may depend on one s objective

fishery management under multiple uncertainty abstract among others who point to environmental variability and managerial uncertainty as causes of fishery collapse roughgarden and smith proc natl acad sci 93 1996 5078 argue that three sources of uncertainty are important for fisheries management variability in fish dynamics inaccurate stock size estimates and inaccurate implementation of harvest quotas we develop a bioeconomic model with these three sources of uncertainty and solve for optimal escapement based on measurements of fish stock in a discrete time model among other results we find 1 when uncertainties are high we generally reject the constant escapement rule advocated in much of the existing literature 2 inaccurate stock estimation affects policy in a fundamentally different way than the other sources of uncertainty and 3 the optimal policy leads to significantly higher commercial profits and lower extinction risk than the optimal constant escapement policy by 42 and 56 respectively

fisheries management under cyclical population dynamics cycles in environmental conditions e g sea surface temperature directly impact fish growth this paper extends the classical gordon schaefer fishery model by replacing the constant growth rate with a cyclical growth rate the optimal harvest rate is shown to fluctuate but the cycle of the harvest rate lags the cycle of the biological growth function with the highest harvest rate occurring after biological conditions start to decline simulations contrast various fishing policies and illustrate the proclivity to crash a fishery if it is wrongfully managed as if there is a constant growth rate with i i d environmental shocks finally we show that small cyclical fluctuations in one species can result in large fluctuations in the optimal harvest rate of another species if the fish species are interlinked through predator prey relationships

fishing quota markets abstract in 1986 new zealand responded to the open access problem by establishing the world s largest individual transferable quota itq system using a 15 year panel dataset from new zealand that covers 33 species and more than 150 markets for fishing quotas we assess trends in market activity price dispersion and the fundamentals determining quota prices we find that market activity is sufficiently high in the economically important markets and that price dispersion has decreased we also find evidence of economically rational behavior through the relationship between quota lease and sale prices and fishing output and input prices ecological variability and market interest rates controlling for these factors our results show a greater increase in quota prices for fish stocks that faced significant reductions consistent with increased profitability due to rationalization overall this suggests that these markets are operating reasonably well implying that itqs can be effective instruments for efficient fisheries management

prices versus quantities in fisheries models comment jensen and vestergaard 2003 compare price regulation with quantity regulation under economic uncertainty in the spirit of weitzman 1974 for a schooling fishery without search cost they find that price regulation is preferred over quantity regulation when demand for fish is elastic however this finding is based on an assumption that does not hold and in fact quantity regulation is always preferred for this type of fishery irrespective of the demand elasticity in this note we show that a pro quota result always applies for a schooling fishery without search costs

landing fees vs harvest quotas with uncertain fish stocks a revised version of this paper was published in the journal of environmental economics and management volume 43 issue 2 march 2002 pages 325 338

asymmetric information and uncertainty the usefulness of logbooks as a regulation measure abstract in many fisheries managed by quota systems fishermen are required to keep a logbook containing information about catches no well functioning enforcement system is set up in connection with the logbooks since the purpose is to assist biologists in making stock assessments in this paper we consider a case where three market failures a stock externality problem a stock uncertainty problem and problems with measuring individual catches arise simultaneously it is shown that a stock tax and a tax on voluntary self reported catches may solve these three problems by taxing voluntary self reported catches we make use of logbook information it is shown using an analytic model that it will be in the interest of risk averse fishermen to report part of their catch voluntarily even without an enforcement policy in addition it is shown that the tax structure can secure optimal expected individual catches and empirical simulations show that the tax payment is relatively low thus the tax system may be useful in practical fisheries management

landing fees versus fish quotas the relative efficiency of landing fees versus quota controls to achieve given escapement levels is examined the criterion is profit per year over a given time horizon the model employed is a discrete version of the logistic model where growth is influenced by a random variable simulations are used to compare landing fees and quota controls under imprecise stock estimates variable availability of fish and random fish prices while ecological uncertainty combined with imprecise stock estimates favors fee control as shown byweitzman the opposite can be the case under uncertainty about the availability of fish or fish price