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More Landings for Higher Profit? Inverse Demand Analysis of the Bluefin Tuna Auction Price in Japan and Economic Incentives in Global Bluefin Tuna Fisheries Management

Author

Listed:
  • Chin-Hwa Jenny Sun

    (Gulf of Maine Research Institute)

  • Fu-Sung Chiang

    () (National Taiwan Ocean University)

  • Dale Squires

    (Department of Economics, University of California San Diego)

Abstract

This paper estimates the global bluefin tuna market price response to shifts in landings. A fisherman's income and resulting incentives to accept management measures controlling catch levels depends on responsiveness of price. To capture the complexity of substituting across various sources of supply and product form, a general synthetic inverse demand system (GSIDS) is estimated to identify the impact of overall landings on bluefin tuna (BFT) prices. This system estimates price flexibilities of fresh and frozen longline-caught tunas (both Pacific and Atlantic bluefin, southern bluefin tunas (SBT) and bigeye tuna) in the Japanese sashimi auction market, which serves as the single leading market for global bluefin tunas. Based on the estimated scale flexibility of frozen BFT (0.911), which is not much different from unity, the overall frozen EABFT sector can be seen as the only winner in light of the EABFT supply increases (given price decreases slightly less than supply increases, so revenue increases more than proportionately). There is no guarantee that the individual fishermen's revenue will increase, because of the absence of an ITQ system that guarantees a certain proportion of the quota/catch. Additionally, the risks (in terms of long-term health and productivity of the stock) accompanying an abrupt TAC increment in pressure on the path to guaranteeing 60% recovery of stock would outweigh the gain in revenue overall, given sectors that lose financially - Japanese BFT fishermen, western bluefin fishermen, Atlantic and Pacific bigeye fishermen, SBT fishermen, and BFT fresh exporters. Even though total revenue might stay the same for frozen BFT, fishermen will experience lower profit due to operating cost increases with increased landings when the supply of eastern Atlantic BFT increases.

Suggested Citation

  • Chin-Hwa Jenny Sun & Fu-Sung Chiang & Dale Squires, 2017. "More Landings for Higher Profit? Inverse Demand Analysis of the Bluefin Tuna Auction Price in Japan and Economic Incentives in Global Bluefin Tuna Fisheries Management," Working Papers 1701, Institute of Applied Economics, National Taiwan Ocean University, Taiwan, revised Aug 2017.
  • Handle: RePEc:nto:wpaper:1701
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    File URL: http://www.iae.ntou.edu.tw/RePEc/nto/pdf/201701.pdf
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    References listed on IDEAS

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    Cited by:

    1. Jules Selles, 2018. "Fisheries management: what uncertainties matter?," Working Papers hal-01824238, HAL.

    More about this item

    Keywords

    Conservation Incentives; General Synthetic Inverse Demand Systems; Own-Quantity; Flexibility; Scale Flexibility; Tuna Sashimi Market;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices

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