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Cod Today and None Tomorrow: The Economic Value of a Marine Reserve

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  • R. Quentin Grafton
  • Tom Kompas
  • Pham Van Ha

Abstract

Using data from what was once one of the world’s largest capture fisheries, the northern cod fishery, the economic value of a marine reserve is calculated using a stochastic optimal control model with a jump-diffusion process. Counterfactual analysis shows that with a stochastic environment an optimal-sized marine reserve in this fishery would have prevented the fishery’s collapse and generated a triple payoff: raising resource rents even if harvesting was "optimal"; decreasing recovery time for the biomass to return to its former state, smoothing fishers’ harvests and resource rents; and lowering the chance of a catastrophic collapse following a negative shock.

Suggested Citation

  • R. Quentin Grafton & Tom Kompas & Pham Van Ha, 2009. "Cod Today and None Tomorrow: The Economic Value of a Marine Reserve," Land Economics, University of Wisconsin Press, vol. 85(3), pages 454-469.
  • Handle: RePEc:uwp:landec:v:85:y:2009:i:3:p:454-469
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    References listed on IDEAS

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    1. R. Quentin Grafton & Leif K. Sandal & Stein Ivar Steinshamn, 2000. "How to Improve the Management of Renewable Resources: The Case of Canada's Northern Cod Fishery," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(3), pages 570-580.
    2. repec:cup:macdyn:v:1:y:1997:i:1:p:45-75 is not listed on IDEAS
    3. Kevin Fox & Robert Hill & W. Diewert, 2004. "Identifying Outliers in Multi-Output Models," Journal of Productivity Analysis, Springer, vol. 22(1), pages 73-94, July.
    4. Caddy, J. F. & Gulland, J. A., 1983. "Historical patterns of fish stocks," Marine Policy, Elsevier, pages 267-278.
    5. Gaspar, Jess & L. Judd, Kenneth, 1997. "Solving Large-Scale Rational-Expectations Models," Macroeconomic Dynamics, Cambridge University Press, vol. 1(01), pages 45-75, January.
    6. Pezzey, John C. V. & Roberts, Callum M. & Urdal, Bjorn T., 2000. "A simple bioeconomic model of a marine reserve," Ecological Economics, Elsevier, vol. 33(1), pages 77-91, April.
    7. Daniel E. Lane & Halldor P. Palsson, 1996. "Stock Rebuilding Strategies under Uncertainty: The Case for "Sentinel Fisheries."," Canadian Journal of Economics, Canadian Economics Association, vol. 29(s1), pages 151-156, April.
    8. Sanchirico, James N. & Wilen, James E., 2001. "A Bioeconomic Model of Marine Reserve Creation," Journal of Environmental Economics and Management, Elsevier, vol. 42(3), pages 257-276, November.
    9. R. Quentin Grafton & Tom Kompas & Pham Van Ha, 2006. "The Economic Payoffs from Marine Reserves: Resource Rents in a Stochastic Environment," The Economic Record, The Economic Society of Australia, vol. 82(259), pages 469-480, December.
    10. Smith, Martin D. & Wilen, James E., 2003. "Economic impacts of marine reserves: the importance of spatial behavior," Journal of Environmental Economics and Management, Elsevier, vol. 46(2), pages 183-206, September.
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    Citations

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    Cited by:

    1. Doole, Graeme J. & Pannell, David J., 2013. "A process for the development and application of simulation models in applied economics," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(1), March.
    2. Greenville, Jared W. & MacAulay, T. Gordon, 2007. "Bioeconomic analysis of protected area use in fisheries management," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(4), December.
    3. Greenville, Jared W. & MacAulay, T. Gordon, 2006. "A Bioeconomic Analysis of Protected Area use in Fisheries Management," 2006 Conference (50th), February 8-10, 2006, Sydney, Australia 139738, Australian Agricultural and Resource Economics Society.
    4. Maroto, Jose M. & Moran, Manuel, 2014. "Detecting the presence of depensation in collapsed fisheries: The case of the Northern cod stock," Ecological Economics, Elsevier, vol. 97(C), pages 101-109.
    5. Greenville, Jared W. & MacAulay, T. Gordon, 2006. "Marine Protected Areas in Fisheries Management," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25532, International Association of Agricultural Economists.
    6. Greenville, Jared W. & MacAulay, T. Gordon, 2006. "A Bioeconomic Analysis of Protected Area use in Fisheries Management," 2006 Annual meeting, July 23-26, Long Beach, CA 21469, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Quentin Grafton, R., 2010. "Adaptation to climate change in marine capture fisheries," Marine Policy, Elsevier, pages 606-615.
    8. Yamazaki, Satoshi & Jennings, Sarah & Quentin Grafton, R. & Kompas, Tom, 2015. "Are marine reserves and harvest control rules substitutes or complements for rebuilding fisheries?," Resource and Energy Economics, Elsevier, vol. 40(C), pages 1-18.
    9. Greenville, Jared W. & MacAulay, T. Gordon, 2006. "Protected Areas and the Management of Fisheries: An Institutional Perspective," 2006 Conference (50th), February 8-10, 2006, Sydney, Australia 139739, Australian Agricultural and Resource Economics Society.
    10. Quentin Grafton, R., 2010. "Adaptation to climate change in marine capture fisheries," Marine Policy, Elsevier, pages 606-615.
    11. Wisdom Akpalu & Worku Bitew, 2014. "Optimum reserve size, fishing induced change in carrying capacity, and phenotypic diversity," Journal of Bioeconomics, Springer, pages 289-304.

    More about this item

    JEL classification:

    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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