Does the optimal size of a fish stock increase with environmental uncertainties?
We analyze the effect of environmental uncertainties on optimal fishery management in a bio-economic fishery model. Unlike most of the literature on resource economics, but in line with ecological models, we allow the different biological processes of survival and recruitment to be affected differently by environmental uncertainties. We show that the overall effect of uncertainty on the optimal size of a fish stock is ambiguous, depending on the prudence of the value function. For the case of a risk-neutral fishery manager, the overall effect depends on the relative magnitude of two opposing effects, the 'convex-cost effect' and the 'gambling effect'. We apply the analysis to the Baltic cod and the North Sea herring fisheries, concluding that for risk neutral agents the net effect of environmental uncertainties on the optimal size of these fish stocks is negative, albeit small in absolute value. Under risk aversion, the effect on optimal stock size is positive for sufficiently high coefficients of constant relative risk aversion.
|Date of creation:||2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 0431-880 3282
Fax: 0431-880 3150
Web page: http://www.wiso.uni-kiel.de/econ/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Miles S. Kimball, 1989.
"Precautionary Saving in the Small and in the Large,"
NBER Working Papers
2848, National Bureau of Economic Research, Inc.
- Kimball, Miles S, 1990. "Precautionary Saving in the Small and in the Large," Econometrica, Econometric Society, vol. 58(1), pages 53-73, January.
- Reed, William J., 1979. "Optimal escapement levels in stochastic and deterministic harvesting models," Journal of Environmental Economics and Management, Elsevier, vol. 6(4), pages 350-363, December.
- de Zeeuw, Aart & Zemel, Amos, 2012.
"Regime shifts and uncertainty in pollution control,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 36(7), pages 939-950.
- Aart de Zeeuw & Amos Zemel, 2012. "Regime Shifts and Uncertainty in Pollution Control," CESifo Working Paper Series 3697, CESifo Group Munich.
- Sethi, Gautam & Costello, Christopher & Fisher, Anthony C. & Hanemann, W. Michael & Karp, Larry S, 2002.
"Fishery management under multiple uncertainty,"
CUDARE Working Paper Series
929, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
- Sethi, Gautam & Costello, Christopher & Fisher, Anthony C. & Hanemann, W. Michael & Karp, Larry, 2004. "Fishery Management Under Multiple Uncertainty," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt8122f9d2, Department of Agricultural & Resource Economics, UC Berkeley.
- De Zeeuw, A. & Polasky, S. & Wagener, F.O.O., 2010.
"Optimal Management with Potential Regime Shifts,"
CeNDEF Working Papers
10-10, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
- Clark, Colin W. & Kirkwood, Geoffrey P., 1986. "On uncertain renewable resource stocks: Optimal harvest policies and the value of stock surveys," Journal of Environmental Economics and Management, Elsevier, vol. 13(3), pages 235-244, September.
- Singh, Rajesh & Weninger, Quinn & Doyle, Matthew, 2006.
"Fisheries Management with Stock Growth Uncertainty and Costly Capital Adjustment,"
Staff General Research Papers
12765, Iowa State University, Department of Economics.
- Singh, Rajesh & Weninger, Quinn & Doyle, Matthew, 2006. "Fisheries management with stock growth uncertainty and costly capital adjustment," Journal of Environmental Economics and Management, Elsevier, vol. 52(2), pages 582-599, September.
- Steffen Andersen & Glenn W. Harrison & Morten I. Lau & E. Elisabet Rutström, 2008. "Eliciting Risk and Time Preferences," Econometrica, Econometric Society, vol. 76(3), pages 583-618, 05.
- Christine Roeckmann & Uwe A. Schneider & Michael A. St.John & Richard S.J. Tol, 2005. "Rebuilding the Eastern Baltic cod stock under environmental change - a preliminary approach using stock, environmental, and management constraints," Working Papers FNU-84, Research unit Sustainability and Global Change, Hamburg University, revised Dec 2005.
- Costello, Christopher & Polasky, Stephen, 2008. "Optimal harvesting of stochastic spatial resources," Journal of Environmental Economics and Management, Elsevier, vol. 56(1), pages 1-18, July.
- Quaas, Martin F. & Requate, Till & Ruckes, Kirsten & Skonhoft, Anders & Vestergaard, Niels & Voss, Rudi, 2013. "Incentives for optimal management of age-structured fish populations," Resource and Energy Economics, Elsevier, vol. 35(2), pages 113-134.
- Weitzman, Martin L., 2002. "Landing Fees vs Harvest Quotas with Uncertain Fish Stocks," Journal of Environmental Economics and Management, Elsevier, vol. 43(2), pages 325-338, March.
- Christopher Costello & Stephen Polasky & Andrew Solow, 2001. "Renewable resource management with environmental prediction," Canadian Journal of Economics, Canadian Economics Association, vol. 34(1), pages 196-211, February.
- Lone Grønbæk Kronbak, 2002. "The Dynamics of an Open Access: The case of the Baltic Sea Cod Fishery - A Strategic Approach -," Working Papers 31/02, University of Southern Denmark, Department of Environmental and Business Economics.
When requesting a correction, please mention this item's handle: RePEc:zbw:cauewp:201209. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.