Three Essays on Shellfish Management in Rhode Island

Shellfish resources are the main fishery resources commercially harvested and cultured in Rhode Island. Wild shellfish management in Rhode Island is undertaken by the RI Department of Environmental Management (DEM) aiming to achieve, among other objectives, conserving naturally occurring shellfish populations in RI waters and managing public health outcomes due to, water quality issues. However, for any management scheme or regulation to be effective, policy must recognize the economic forces at work when evaluating proposed intervention or regulation of shellfishing. Regulations would influence the harvesters’ behavior through the change in the harvested quantity or market price of the product and this will affect the state of shellfish stock. As such, ignoring the market force could not only nullify the management effectiveness but could backfire and lead to unintended adverse impact on the primary target of management - the healthy stock of shellfish. Moreover, some of the regulations for shellfish resources might also affect the public. For example, people value houses near to the coast due to the aestheticism and serenity. However, construction of oyster farms near their backyard water might affect their view and calmness due to the frequent traffic in the water, which might decrease the value of those houses. Since the problem is directly linked to public, it is critically important to analyze whether regulations affect the houses and life of the coastal region. This dissertation addresses three research questions related to the management of shellfish resources in Rhode Island. In the first manuscript a market study was conducted to study the price and quantity relationships of commercially harvested shellfish in Rhode Island. The study analyzed the price sensitivity of shellfish products (three different market categories of quahog, scallops, and whelk) with respect to quantity landed of its own and other products using non-linear Almost Ideal Demand System (NL-AIDS) model. The study shows that the shellfish products considered in the analysis were price inflexible indicating that a significantly huge quantity of shellfish is required to change the price of the species. The study also showed that the shellfish species are substitutes to each other. The second manuscript measures the economic performance of shellfish transplant program conducted in some of the fishing areas to enrich the stock of quahog in Narragansett Bay area. The RI Department of Environment and Management (DEM) collect quahog from prohibited fishing areas with the help of fishermen and transplant to some of the selected open fishing areas. Using commercial harvest data of quahog from the bay area, the study investigated effect of transplant of quahog on quantity harvested and stock population in Narragansett Bay area. Moreover, profit from the transplant program was calculated to examine its net returns. The study showed that there is no statistical evidence to prove that transplantation is significantly influencing the harvest of quahog in Narragansett Bay area. The net returns estimates suggest that the transplant operation is not profitable. The third manuscript analyzes the effect of aquaculture on the public by looking at the impact of construction of oyster farms on the neighboring housing value in Rhode Island, using housing sale transaction data of Rhode Island from 2000 to 2012. The difference-in-difference method was combined within a Hedonic price model to evaluate the effect of farm construction occurring over time. The result showed that housing value is unaffected by construction of oyster farms in the neighborhood. This points to an important policy implication that people do not consider construction of oyster farms while purchasing property. The lack of consideration might be due to two reasons, first they consider only characteristics that are directly linked to their daily life, and secondly they might be actually supporting eco-friendly operations such as farms in their neighborhood