Title

Fisheries management with stock growth uncertainty and costly capital adjustment

Campus Units

Economics

Document Type

Article

Publication Version

Submitted Manuscript

Publication Date

2006

Journal or Book Title

Journal of Environmental Economics and Management

Volume

52

Issue

2

First Page or Article ID Number

582

Last Page

599

DOI

10.1016/j.jeem.2006.02.006

Abstract

We develop a dynamic model of a fishery which simultaneously incorporates random stock growth and costly capital adjustment. Numerical techniques are used to solve for the resource-rent-maximizing harvest and capital investment policies. Capital rigidities bring diminishing marginal returns to the current period harvest, and introduce an incentive to smooth the catch over time. With density-dependent stock growth, however, catch smoothing increases stock variability resulting in reduced average yields. The optimal management policy balances the catch smoothing benefits against yield loss. We calibrate the model to the Alaskan pacific halibut fishery to demonstrate the main insights.

JEL Classification

D02, Q2

Comments

NOTICE: this is the author’s version of a work that was accepted for publication in Journal of Environmental Economics and Management. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Environmental Economics and Management, [52, 2, (2006)] DOI: 10.1016/j.jeem.2006.02.006

Copyright Owner

Elsevier B.V.

Language

en

File Format

application/pdf