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Economics & Social Sciences Research Program

Estimating Heterogeneous Capacity and Capacity Utilization in a Multispecies Fishery

One of the main concerns in fishery management is the effect of excess fishing capacity on the biological and economic health of the fisheries. To assess overcapacity in fisheries, economists have developed and improved methodologies to provide estimates to fishery managers.

In this research, we use a stochastic production frontier model to investigate the presence of heterogeneous production and its impact on fleet capacity and capacity utilization in a multispecies fishery. We propose a new fleet capacity estimate that incorporates complete information on the stochastic differences between vessel-specific technical efficiency distributions, where technical efficiency is a measure of the quantity of inputs used to create a unit of catch.

Results indicate that ignoring heterogeneity in production technologies within a multispecies fishery as well as the complete distribution of a vessel's technical efficiency score, may lead to erroneous fleet-wide production profiles and estimates of capacity. Our new estimate of capacity enables out-of-sample production predictions which may be useful to policy makers. This article is in press at the Journal of Productivity Analysis.

By Ron Felthoven

Global Trade in Food and Energy Commodities Analyzed Under IPCC Scenarios

Scenarios from the Intergovernmental Panel on Climate Change (IPCC) are the basis for analyzing potential biophysical effects of climate change on Alaska's marine ecosystems, including economic impacts on commercial fisheries.

Gauging the economic impacts requires analyzing both the biophysical effects that could accrue, and the socioeconomic conditions that would exist, under the IPCC scenarios. However, the emissions scenarios that are used to drive the climate models are based on energy-economic models that do not provide information on how household demand for food, energy, and other goods will be affected by projected changes in demographic variables such as population age-structure, household size, and urbanization.

Each could have important effects on both the scale and composition of demand for food and energy commodities. Therefore, researchers from the AFSC, the National Center for Atmospheric Research (NCAR), and the International Institute for Applied Systems Analysis (IIASA) developed a global economic model, and supporting data, to analyze these effects.

In particular, the global model and data were used to analyze effects of demographic changes that are expected to occur over the next several decades on the demand for energy and food under assumptions about future technical change as embodied in the IPCC scenarios. The global model is a dynamic computable general equilibrium model, called the population-environment-technology (PET) model, with detail in energy and food sectors.

The global data are comprised of economic trade and production data from the Global Trade Analysis Project (GTAP), sector-level energy data from the International Energy Agency, detailed data on consumption patterns across different demographic categories from several national household surveys, and household-level population projections. The household surveys include detailed information on consumption of food and other commodities, and these form the empirical basis for our results on future demands.

To analyze future economic conditions, we developed a new model tuning procedure so that our global economic model matches gross domestic product (GDP), fossil-fuels based carbon dioxide (CO2) emissions, and primary energy outcomes in two reference scenarios (A2 and B2) from the IPCC Special Report on Emissions Scenarios (SRES) as represented by numerical results from IIASA's MESSAGE model (

The final set of simulations for A2 and B2 scenarios were completed recently using the PET model. A manuscript with these results is in preparation.

The PET model has been linked to a Global Biogeochemical Cycles model (i.e., Earth Systems Model of Intermediate Complexity), called the Integrated Science Assessment Model (ISAM). In collaboration with NCAR and the Department of Atmospheric Sciences at the University of Illinois Urbana-Champaign, the coupled PET-ISAM model (iPETS) will be used to develop a suite of ocean acidification scenarios for the Bering Sea. These are described in the AFSC Ocean Acidification Research Plan.

By Mike Dalton

Changes in Bargaining Power Under Sablefish Rationalization

In a study with coauthor Harrison Fell of the environmental economics research organization Resources for the Future, Dr. Alan Haynie (ESSR Program) has completed a paper that is soon to be published in the journal Economic Inquiry, entitled "Estimating Time-varying Bargaining Power: A Fishery Application."

In this paper, they propose a novel approach to estimate bargaining power in bilateral bargaining frameworks. They apply the technique to the ex-vessel fish market in the sablefish fishery that changed management systems from a regulated open-access system to an individual fishing quota (IFQ) system during the period of the study.

The authors find that post-IFQ implementation, fishers do improve their bargaining power and thus accrue more of the rents generated by the fishery. However, unlike previous studies, they find that fishers do not move to a point of complete rent extraction. Rather, fishers and processors appear to be in a near symmetric bargaining situation post-IFQ implementation.

While it is difficult to know how this result may apply in other fisheries, this is an important result because concerns of complete rent-extraction by fishers have been one factor that has made processors very reluctant to move to a catch share system.

By Alan Haynie

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