An examination of price in the economic management of marine resources: Three empirical essays

This dissertation conducts an examination of price as an economic parameter of strategic importance for the improved management of marine resources. To this end, the dissertation examines three different problems in marine resource economics: the effectiveness of rotational management strategies in the Atlantic sea scallop fishery; the implications of market interactions with the aquaculture sector for Alaskan salmon fisheries; and the effectiveness of targeted tariffs in the 2004 shrimp antidumping case. Each of these studies tackles a number of management issues of current relevance for U.S. fisheries. In each case, economic analysis leads to a better understanding of the concept of price as a strategic parameter to improve the economic performance of commercial fisheries. The first manuscript develops a bioeconomic model for the Atlantic sea scallop fisheries in Georges Bank and the Mid-Atlantic Bight regions. The model is then used to identify optimal management strategies for the resource. Results indicated that the net present value of the fishery is maximized by implementing rotational management strategies, whereby fishing areas are closed for several years to let scallops grow undisturbed, with harvesting taking place only at the end of the “growout” cycles. The optimal schedules of closures and re-openings recommended by the model were compared with the current management strategies implemented by fishing authorities. The analysis demonstrates that the superior performance of rotational management plans lies in the biological characteristics of the resource (low mobility, fast growth rates, low natural mortality) and the price premiums paid for larger scallops. Rotational management also leads to substantial savings in operating costs and a potential reduction in bycatch as contact times with the bottom are shortened. The second manuscript extends the early theoretical model of market interactions between aquaculture and common-property fisheries developed by Anderson (1985) to include the case of limited-entry fisheries. The theoretical model is then applied to examine the empirical evidence from the Bristol Bay sockeye salmon fishery in Alaska. Participation rates in this fishery have declined since 2001 as competition with the salmon aquaculture sector has led to drastic declines in ex-vessel prices. An econometric model was developed to examine how the emergence of aquaculture has reduced the potential for rents in the fishery despite judicious biological management of the stocks and restricted access regulations. The model also describes how cooperative management policies may help the industry recover a portion of the rents lost and improve its competitive standing against aquaculture. The third and final manuscript is an examination of the empirical evidence regarding the effectiveness of targeted tariffs in the recent antidumping case against the six largest exporters of shrimp to the U.S. The antidumping petition was filed by the domestic wild shrimp industry in an attempt to raise ex-vessel prices for the domestic product, which have declined substantially since 2001 as a result of competition with low-priced aquaculture imports. The analysis confirms theoretical arguments against the efficacy of targeted tariffs, which implicitly act as subsidies to countries and products not named in the antidumping investigation. Given the lack of effectiveness of tariffs, the potential for retaliation, and the high costs of trade litigation, the domestic industry is advised to explore alternative strategies to reduce costs and improve profit margins