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A Spatial Model of Dolphin Avoidance in the Eastern Tropical Pacific Ocean

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  • Robert L. Hicks

    () (Department of Economics, College of William and Mary)

  • Kurt Schnier

    () (Department of Environmental and Natural Reseource Economics, University of Rhode Island)

Abstract

This paper examines the impact of dolphin-safe eco-labeling and how it fundamentally altered the spatial distribution of fishing effort and fishermen's willingness to pay to avoid dolphins. To do this, a dynamic discrete choice econometric model is applied to the Eastern Tropical Pacific tuna fishery. This econometric approach combines a dynamic programming component with the static discrete site choice model. This estimator couples the current period projected profits associated with fishing a specific site with the value of all future location choices on the cruise, assuming choices are made optimally. The key feature of this model is that it recovers behavioral parameters and solves the dynamic programming problem recursively. The dynamic site choice model reveals a markedly higher impact on producers as compared to the commonly used static model following the labeling regime. Further, in all but a few cases the common practice in dynamic choice models of setting discount factors equal to one is rejected.

Suggested Citation

  • Robert L. Hicks & Kurt Schnier, 2006. "A Spatial Model of Dolphin Avoidance in the Eastern Tropical Pacific Ocean," Working Papers 25, Department of Economics, College of William and Mary.
  • Handle: RePEc:cwm:wpaper:25
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    File URL: http://economics.wm.edu/wp/cwm_wp25.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    location choice; dynamic random utility modeling; dolphin-safe eco-labeling;

    JEL classification:

    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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