Abstract
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.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Andersen S, Harrison G, Lau M, Rutstrom E (2008) Eliciting risk and time preferences. Econometrica 76(3): 583–618
Beverton RJH, Holt SJ (1957) On the dynamics of exploited fish populations. Blackburn Press, Caldwell
Clark CW (1990) Mathematical bioeconomics. Wiley, New York
Clark C, Kirkwood G (1986) On uncertain renewable resource stocks: optimal harvest policies and the value of stock surveys. J Environ Econ Manag 13: 235–244
Costello C, Polasky S (2008) Optimal harvesting of stochastic spatial resources. J Environ Econ Manag 56(1): 1–18
Costello C, Polasky S, Solow A (2001) Renewable resource management with environmental prediction. Can J Econ 34(1): 196–211
Zeeuw A, Zemel A (2012) Regime shifts and uncertainty in pollution control. J Econ Dyn Control 36(7): 939–950
Fiskeridirektoratet (2007) Fiskeristatistisk Årbog 2007 (yearbook of fishery statistics 2007). Ministeriet for Fødevarer, Landbrug og Fiskeri, Kopenhavn, and previous editions from 2000 onwards
Fiskeriregnskabsstatistik (2007) Account statistics for fishery. Ministeriet for Fødevarer, Landbrug og Fiskeri, Statens Jordbrugs- og Fiskeriøkonomiske Institut, Kopenhavn, and previous editions from 2000 onwards
Harley S, Myers R, Dunn A (2001) Is catch-per-unit-effort proportional to abundance?. Can J Fish Aquat Sci 58(9): 1760–1772
Hilborn R, Walters CJ (1992) Quantitative fisheries stock assessment—choice, dynamics and uncertainty. Kluwer, Boston
ICES (1998) Report of the study group on stock-recruitment relationships for north sea autumn-spawning herring. ICES CM 1998/D:2, p 60
ICES (2007) Report of the herring assessment working group for the area south of 62on. ICES CM 2007/ACFM:11, p 538
ICES (2009) Report of the Baltic fisheries assessment working group (WGBFAS). ICES CM 2009/ACOM:07
ICES (2010a) Ices advice 2010, book 6. International Council of the Exploration of the Sea, Copenhagen
ICES (2010b) Ices advice 2010, book 8. International Council of the Exploration of the Sea, Copenhagen
ICES (2011) Report of the Baltic fisheries assessment working group (WGBFAS). ICES CM 2011/ACOM:11
Kimball M (1990) Precautionary saving in the small and in the large. Econometrica 58(1): 53–73
Kronbak LG (2002) The dynamics of an open access: the case of the Baltic Sea cod fishery—a strategic approach. Working Papers 31/02, University of Southern Denmark, Department of Environmental and Business Economics
Kronbak LG (2005) The dynamics of an open-access fishery: Baltic Sea cod. Marine Resour Econ 19: 459–479
Miranda M, Fackler P (2002) Applied computational economics and finance. MIT Press, Cambridge
Nostbakken L (2008) Stochastic modelling of the North Sea herring fishery under alternative management regimes. Marine Resour Econ 22:63–84
Pindyck RS (1984) Uncertainty in the theory of renewable resource markets. Rev Econ Stud LI, 289–303
Polasky S, Zeeuw A, Wagener F (2011) Optimal management with potential regime shifts. J Environ Econ Manag 62: 229–240
Quaas M, Requate T, Ruckes K, Skonhoft A, Vestergaard N, Voss R (2010) Incentives for optimal management of age-structured fish populations. In: WCERE 2010; fourth world congress of environmental and resource economists; June 28 to July 2, 2010, Montreal
Reed WJ (1979) Optimal escapement levels in stochastic and deterministic harvesting models. J Environ Econ Manag 6: 350–363
Rockmann C, Schneider UA, St. John MA, Tol RSJ (2007) Rebuilding the Eastern Baltic cod stock under environmental change—a preliminary approach using stock, environmental, and management constraints. Nat Resour Model 20(2): 223–262
Sethi G, Costello C, Fisher A, Hanemann M, Karp L (2005) Fishery management under multiple uncertainty. J Environ Econ Manag 50(2): 300–318
Singh R, Weninger Q, Doyle M (2006) Fisheries management with stock growth uncertainty and costly capital adjustment. J Environ Econ Manag 52(2): 582–599
Weitzman ML (2002) Landing fees vs harvest quotas with uncertain fish stocks. J Environ Econ Manag 43: 325–338
Author information
Authors and Affiliations
Corresponding author
Electronic Supplementary Material
The Below is the Electronic Supplementary Material.
Rights and permissions
About this article
Cite this article
Kapaun, U., Quaas, M.F. Does the Optimal Size of a Fish Stock Increase with Environmental Uncertainties?. Environ Resource Econ 54, 293–310 (2013). https://doi.org/10.1007/s10640-012-9606-y
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10640-012-9606-y