Econometric Measurement of Fishing Capacity and Capacity Utilization

Summary

This project is aimed at developing a capacity measurement methodology that will be useful for management purposes. The impetus for this research is the recent trend toward frontier-based capacity measurement, in which capacity estimates embody the notion that vessels could increase their efficiency to the highest levels exhibited by similar vessels.

The primary limitation of much of the recent work utilizing the frontier is that inappropriate conclusions may be drawn regarding potential output increases if comparisons are made among observations generated under different regulatory, environmental, and resource conditions that are not independently identified. Because data on these factors is typically unavailable, and the potential problems due to its absence may be exacerbated in frontier models, we propose an alternative, non-frontier methodology that is affected to a lesser degree when such information is absent. Our approach uses a multi-output, multi-input transformation function within a standard econometric model. We also compute measures of CU that represent the amount by which capacity is utilized relative to that which would occur in the absence of a race for fish, using information from before and after property rights were present in the fishery under study. We also compute capacity and CU measures under various hypothetical increases in season length. This work is being conducted jointly with Catherine Morrison Paul at the University of California, Davis.

Source: Unpublished

For more information, please contact: Ron.Felthoven@noaa.gov