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Economics & Social Sciences Research Program

Fishing Revenue, Productivity and Product Choice in the Alaskan Pollock Fishery

Economic performance measurement is a key element in evaluating the impacts of fishery management decisions, yet relatively little attention has been paid to this area in the fishery economics literature. Existing studies tend to focus on fish harvesting and technical efficiency, capacity utilization, or quotas. Another important aspect of fishery performance, however, pertains to the revenue generated through fish processing, which is linked to the way fish are harvested, as well as the products produced from the fish.

In this study, Economics & Social Sciences Research (ESSR) Program researcher, Dr. Ron Felthoven, and Dr. Catherine Morrison Paul (University of California, Davis) econometrically estimate a revenue function, recognizing potential endogeneity and a variety of fishing inputs and conditions, to evaluate the factors underlying fishing revenues in the Alaskan pollock fishery.

The authors find significant own-price supply responses and product substitutability, and enhanced revenues from the increases in season length and the number and duration of tows induced by the American Fisheries Act. They also find significant growth in economic productivity – higher revenues over time after controlling for observed productive factors and price changes, which exceeds that attributable to increased harvests.

By Ron Felthoven

Employing a Cost Engineering Approach to Estimate Vessel Expenditures

To conduct an economic analysis of a fishery, it is critical that one obtains or estimates the cost and expenditures incurred by the vessels operating within that fishery. Researchers often depend on vessel mail surveys for obtaining such information. However, the information requested in the surveys is considered sensitive and confidential to many vessel owners who are reluctant to provide it. An alternative approach to obtaining the same information is to survey the businesses that provide goods and services to fishermen. As part of an ongoing regional economic data collection project in the Southwest and Gulf Coast regions of Alaska, we are planning to survey/interview local businesses and boat builders and dealers. From local businesses we will get data on sales to harvesting vessels. From vessel builders and dealers we will get information on many of the operating and maintenance costs.

Specifically, for obtaining the cost information from boat builders and dealers we will use a cost engineering approach to estimate the maintenance, replacement, and hourly vessel operation costs. First, a “proxy” (an average) boat will be developed for each fish harvesting sector based on information on engine horsepower, electrical generation capacity, gross and net weight, gear types, and other technical information available from data sources such as the Commercial Fisheries Entry Commission. Once a proxy boat is developed we will ask boat builders and suppliers to provide us with information about depreciation, maintenance, replacement, and operation costs using industry guidelines.

With this information we will be able to undertake much of the research we plan to conduct for these sectors of Alaska. By utilizing the cost engineering approach we hope to diminish the public burden associated with typical mail-out surveys to vessel owners.

By Chang Seung

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