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Does the optimal size of a fish stock increase with environmental uncertainties?

Author

Listed:
  • Kapaun, Ute
  • Quaas, Martin F.
Abstract
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.

Suggested Citation

  • Kapaun, Ute & Quaas, Martin F., 2012. "Does the optimal size of a fish stock increase with environmental uncertainties?," Economics Working Papers 2012-09, Christian-Albrechts-University of Kiel, Department of Economics.
    • Handle: RePEc:zbw:cauewp:201209
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    References listed on IDEAS

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    Cited by:

    1. Renato Rosa & João Vaz & Rui Mota & Alexandra Silva, 2018. "Preference for Landings’ Smoothing and Risk of Collapse in Optimal Fishery Policies: The Ibero-Atlantic Sardine Fishery," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(4), pages 875-895, December.
    2. Kelsall, Claudia & Quaas, Martin F. & Quérou, Nicolas, 2023. "Risk aversion in renewable resource harvesting," Journal of Environmental Economics and Management, Elsevier, vol. 121(C).
    3. Christopher Costello & Bruno Nkuiya & Nicolas Querou, 2017. "Extracting spatial resources under possible regime shift," Working Papers 17-07, LAMETA, Universtiy of Montpellier.
    4. Christopher Costello & Nicolas Querou & Agnès Tomini, 2014. "Spatial concessions with limited tenure," Post-Print hal-01123392, HAL.
    5. Martin F. Quaas & Max T. Stoeven & Bernd Klauer & Thomas Petersen & Johannes Schiller, 2018. "Windows of Opportunity for Sustainable Fisheries Management: The Case of Eastern Baltic Cod," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 70(2), pages 323-341, June.
    6. Voss, Rudi & Quaas, Martin F. & Schmidt, Jörn O. & Stoeven, Max T. & Francis, Tessa B. & Levin, Phillip S. & Armitage, Derek R. & Cleary, Jaclyn S. & Jones, R. Russ & Lee, Lynn C. & Okamoto, Daniel K., 2018. "Quantifying the benefits of spatial fisheries management – An ecological-economic optimization approach," Ecological Modelling, Elsevier, vol. 385(C), pages 165-172.
    7. Christopher Costello & Daniel Kaffine, 2018. "Natural Resource Federalism: Preferences Versus Connectivity for Patchy Resources," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(1), pages 99-126, September.
    8. Libois, François, 2022. "Success and failure of communities managing natural resources: Static and dynamic inefficiencies," Journal of Environmental Economics and Management, Elsevier, vol. 114(C).
    9. Martin F. Quaas & Ralph Winkler, 2017. "A Market Mechanism for Sustainable and Efficient Resource Use under Uncertainty," CESifo Working Paper Series 6524, CESifo.
    10. Rosa, Renato & Costa, Tiago & Mota, Rui Pedro, 2022. "Incorporating economics into fishery policies: Developing integrated ecological-economics harvest control rules," Ecological Economics, Elsevier, vol. 196(C).
    11. Costello, Christopher & Quérou, Nicolas & Tomini, Agnes, 2015. "Partial enclosure of the commons," Journal of Public Economics, Elsevier, vol. 121(C), pages 69-78.
    12. Quérou, Nicolas & Tomini, Agnes & Costello, Christopher, 2022. "Limited‐tenure concessions for collective goods," Journal of Economic Dynamics and Control, Elsevier, vol. 143(C).
    13. Tahvonen, Olli & Quaas, Martin F. & Voss, Rüdiger, 2018. "Harvesting selectivity and stochastic recruitment in economic models of age-structured fisheries," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 659-676.
    14. Fishman, Ram & B Krishnamurthy, Chandra Kiran, 2021. "An ecological golden rule," Resource and Energy Economics, Elsevier, vol. 64(C).
    15. Jules Selles, 2018. "Fisheries management: what uncertainties matter?," Working Papers hal-01824238, HAL.
    16. Nkuiya, Bruno & Diekert, Florian, 2023. "Stochastic growth and regime shift risk in renewable resource management," Ecological Economics, Elsevier, vol. 208(C).

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    More about this item

    Keywords

    fishery economics; environmental uncertainty; constant escapement; risk aversion; prudence;
    All these keywords.

    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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