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Downward Adjustments in a Cyclical Environment: The Case of Chilean Pelagic Fisheries

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Abstract

Often the scale of production of many industrial fisheries in the world shows rigidity vis à vis declines in fish abundance, which on occasions has generated fishing collapse. This paper studies the two fisheries with the greatest volume of landings in Chile, and which are also characterized by strong variability in their abundance. Production-side aspects that affect the incentives to adjust towards lower fishing efforts are analyzed. To do so, production functions for industrial fleets at each fishery are estimated by resorting to panel data. Two main results are obtained. First, we confirm the empirical relevance of Translog harvest technologies. This contradicts a frequent practice in bioeconomic models, which considers harvest-inputs elasticities as being constant and independent from the scale of production. Second, a set of production-side effects are identified that weaken the incentives to adjust towards lower fishing efforts: increasing returns in the use of variable inputs, which are also strengthened by external economies associated to the aggregate searching effort for fish, and catch yields sensitive to changes in abundance, but where the strength of this effect decreases as abundance declines.

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  • Julio Peña-Torres & Michael Basch & Sebastian Vergara, "undated". "Downward Adjustments in a Cyclical Environment: The Case of Chilean Pelagic Fisheries," ILADES-UAH Working Papers inv143, Universidad Alberto Hurtado/School of Economics and Business.
    • Handle: RePEc:ila:ilades:inv143
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    JEL classification:

    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • L7 - Industrial Organization - - Industry Studies: Primary Products and Construction

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    1. Socio-economics of Fisheries and Aquaculture

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