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The Value of El Niño Forecasts in the Management of Salmon: A Stochastic Dynamic Assessment

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  • Richard M. Adams
  • Stephen Polasky

Abstract

The El Niño-Southern Oscillation (ENSO) is the largest source of interannual variability in global climate. Variability in climate has been linked to variability in fisheries, specifically salmon stocks of the Pacific Northwest. The ability to forecast El Niño events already exists and is likely to improve in coming years. An accurate prediction may have value because it allows for better management decisions. In this article, we develop a bioeconomic model of the coho salmon fishery and derive the value of information from improved El Niño forecasting ability. We find that a perfect El Niño forecast results in an annual welfare gain of approximately $1 million, while imperfect forecasts lead to smaller gains. Results also suggest that optimal management in the face of uncertainty involves a “conservative” management strategy, resulting in lower harvest, higher wild fish escapement, and lower hatchery releases than management in the absence of such uncertainty. Copyright 1998, Oxford University Press.

Suggested Citation

  • Richard M. Adams & Stephen Polasky, 1998. "The Value of El Niño Forecasts in the Management of Salmon: A Stochastic Dynamic Assessment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(4), pages 765-777.
  • Handle: RePEc:oup:ajagec:v:80:y:1998:i:4:p:765-777
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    File URL: http://hdl.handle.net/10.2307/1244062
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    Cited by:

    1. Vincent Martinet & Michel de Lara & Julio Peña & Héctor Ramirez, 2010. "Evaluation of Management Procedures: Application to Chilean Jack Mackerel Fishery," ILADES-Georgetown University Working Papers inv255, Ilades-Georgetown University, Universidad Alberto Hurtado/School of Economics and Bussines.
    2. Bastianin, Andrea & Lanza, Alessandro & Manera, Matteo, 2016. "Economic Impacts of El Niño Southern Oscillation: Evidence from the Colombian Coffee Market," EIA: Climate Change: Economic Impacts and Adaptation 250258, Fondazione Eni Enrico Mattei (FEEM).
    3. Thanarak Laosuthi & David D. Selover, 2007. "Does El Nino Affect Business Cycles," Eastern Economic Journal, Eastern Economic Association, vol. 33(1), pages 21-42, Winter.
    4. Dadakas, Dimitrios & Jakus, Paul M., 1999. "El Nino/Southern Oscillation Effects On Farmland Values In The United States," 1999 Annual meeting, August 8-11, Nashville, TN 21572, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Sanchirico, James, 2004. "A Social Scientist's Perspective on the Potential Benefits of the Census of Marine Life," Discussion Papers dp-04-23-rev, Resources For the Future.
    6. Vincent Martinet & Michel De Lara & Julio Peña-Torres & Héctor Ramírez Cabrera, 2012. "Risk and Sustainability: Assessing Fisheries Management Strategies," EconomiX Working Papers 2012-11, University of Paris Nanterre, EconomiX.
    7. Miller, Steve & Nkuiya, Bruno, 2016. "Coalition formation in fisheries with potential regime shift," Journal of Environmental Economics and Management, Elsevier, vol. 79(C), pages 189-207.
    8. Vincent Martinet & Julio Peña-Torres & Michel Lara & Hector Ramírez C., 2016. "Risk and Sustainability: Assessing Fishery Management Strategies," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(4), pages 683-707, August.
    9. Antle, John M. & Capalbo, Susan Marie & Mooney, Sian, 1999. "Optimal Spatial Scale For Evaluating Economic And Environmental Tradeoffs," 1999 Annual meeting, August 8-11, Nashville, TN 21660, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Haight, Robert G. & Polasky, Stephen, 2010. "Optimal control of an invasive species with imperfect information about the level of infestation," Resource and Energy Economics, Elsevier, vol. 32(4), pages 519-533, November.
    11. Lu, Liang & Elbakidze, Levan, 2012. "Application of Comparative Dynamics in Stochastic Invasive Species Management in Agricultural Production," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 125226, Agricultural and Applied Economics Association.
    12. Sun, Chin-Hwa & Chiang, Fu-Sung & Tsoa, Eugene & Chen, Min-Hsiang, 2006. "The effects of El Nino on the mackerel purse-seine fishery harvests in Taiwan: An analysis integrating the barometric readings and sea surface temperature," Ecological Economics, Elsevier, vol. 56(2), pages 268-279, February.
    13. Michele Baggio, 2016. "Optimal Fishery Management with Regime Shifts: An Assessment of Harvesting Strategies," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(3), pages 465-492, July.
    14. Osgood, Daniel E., 2005. "Snowblind: the importance of climate information for recreational real estate," 2005 Annual meeting, July 24-27, Providence, RI 19571, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    15. Ariaster Baumgratz Chimeli & Francisco de Assis de Souza Filho, 2004. "Climate Forecasting And Emergency Policies Evidence Of Opportunities From Ceará, Brazil," Anais do XXXII Encontro Nacional de Economia [Proceedings of the 32nd Brazilian Economics Meeting] 118, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    16. Machina, Mark J, 2002. "Robustifying the Classical Model of Risk Preferences and Beliefs," University of California at San Diego, Economics Working Paper Series qt1xt4c2qb, Department of Economics, UC San Diego.

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