Fisheries Management with Stock Growth Uncertainty and Costly Capital Adjustment
AbstractWe 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.
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Bibliographic InfoPaper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 12765.
Date of creation: 01 Sep 2006
Date of revision:
Publication status: Published in Journal of Environmental Economics and Management, September 2006, vol. 52 no. 2, pp. 582-599
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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
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Web page: http://www.econ.iastate.edu
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Other versions of this item:
- Singh, Rajesh & Weninger, Quinn & Doyle, Matthew, 2006. "Fisheries management with stock growth uncertainty and costly capital adjustment," Journal of Environmental Economics and Management, Elsevier, vol. 52(2), pages 582-599, September.
- NEP-AGR-2007-03-31 (Agricultural Economics)
- NEP-ALL-2007-03-31 (All new papers)
- NEP-ENV-2007-03-31 (Environmental Economics)
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