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Continuous harvesting costs in sole-owner fisheries with increasing marginal returns

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Author Info

  • Maroto, Jose M.

    ()
    (Department of Estadística e Investigación Operativa II, Universidad Complutense)

  • Moran, Manuel

    ()
    (Department of Fundamentos del Análisis Económico I, Universidad Complutense)

  • Sandal, Leif K.

    ()
    (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration)

  • Steinshamn, Stein I.

    ()
    (Institute for Reasearch in Economics and Business Administration)

Abstract

We develop a bioeconomic model to analyze a sole-owner fishery with fixed costs as well as a continuous cost function for the generalized Cobb-Douglas production function with increasing marginal returns to effort level. On the basis of data from the North Sea herring fishery, we analyze the consequences of the combined effects of increasing marginal returns and fixed costs. We find that regardless of the magnitude of the fixed costs, cyclical policies can be optimal instead of the optimal steady state equilibrium advocated in much of the existing literature. We also show that the risk of stock collapse increases significantly with increasing fixed costs as this implies higher period cycles which is a quite counterintuitive result as higher costs usually are considered to have a conservative effect on resources.

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Bibliographic Info

Paper provided by Department of Business and Management Science, Norwegian School of Economics in its series Discussion Papers with number 2009/6.

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Length: 36 pages
Date of creation: 15 Sep 2009
Date of revision:
Handle: RePEc:hhs:nhhfms:2009_006

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Web page: http://www.nhh.no/en/research-faculty/department-of-business-and-management-science.aspx
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Related research

Keywords: Bioeconomic modelling; Stock collapse; Fixed costs; Pulse fishing; Cyclical dynamics; Increasing marginal returns;

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