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Adjustment Cost and Supply Response in a Fishery: A Dynamic Revenue Function

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  • Frank Asche

Abstract

In industries where firms can adjust product mix in response to price changes, the process can be delayed by adjustment costs. An example is fishermen who change fishing grounds to target different species. If adjustment costs are sufficiently large, this may hamper the fishermen’s response so that regulatory tools that are not efficient in the long run are useful in the short run. Moreover, adjustment costs can influence the choice of species targeted. In this paper dynamic supply equations are specified using a revenue function approach. Different hypotheses about the dynamics of the supply equations are tested for Norwegian trawlers.

Suggested Citation

  • Frank Asche, 2009. "Adjustment Cost and Supply Response in a Fishery: A Dynamic Revenue Function," Land Economics, University of Wisconsin Press, vol. 85(1), pages 201-215.
  • Handle: RePEc:uwp:landec:v:85:y:2009:i:1:p:201-215
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    References listed on IDEAS

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    Cited by:

    1. Joshua K. Abbott & Alan C. Haynie & Matthew N. Reimer, 2015. "Hidden Flexibility: Institutions, Incentives, and the Margins of Selectivity in Fishing," Land Economics, University of Wisconsin Press, vol. 91(1), pages 169-195.
    2. Yang, Sansi & Shumway, C. Richard, 2014. "Dynamic Adjustment in U.S. Agriculture under Climate Uncertainty," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170609, Agricultural and Applied Economics Association.
    3. Diekert , Florian & Lund , Kristen & Schweder, Tore, 2014. "From Open-Access to Individual Quotas: Disentangling the Effects of Policy Reform and Environmental Changes in the Norwegian Coastal Cod Fishery," Memorandum 07/2014, Oslo University, Department of Economics.
    4. Ly, Nguyen & Henry, Kinnucan, 2016. "Some Effects of Income and Population Growth on Fish Price and Welfare," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 229892, Southern Agricultural Economics Association.
    5. Asche, Frank & Bjørndal, Marianne Tranberg & Bjørndal, Trond, 2014. "Development in fleet fishing capacity in rights based fisheries," Marine Policy, Elsevier, vol. 44(C), pages 166-171.
    6. Chang K. Seung & Michael G. Dalton & André E. Punt & Dusanka Poljak & Robert Foy, 2015. "Economic Impacts Of Changes In An Alaska Crab Fishery From Ocean Acidification," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 6(04), pages 1-35, November.

    More about this item

    JEL classification:

    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

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