fisheries: the steady-state model richard t. woodward department of agricultural economics texas...
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![Page 1: Fisheries: The steady-state model Richard T. Woodward Department of Agricultural Economics Texas A&M University r-woodward@tamu.edu Phone: 979-845-5864](https://reader035.vdocuments.site/reader035/viewer/2022081418/56649d3e5503460f94a17bae/html5/thumbnails/1.jpg)
Fisheries: The steady-state model
Richard T. Woodward
Department of Agricultural Economics
Texas A&M University
Phone: 979-845-5864
![Page 2: Fisheries: The steady-state model Richard T. Woodward Department of Agricultural Economics Texas A&M University r-woodward@tamu.edu Phone: 979-845-5864](https://reader035.vdocuments.site/reader035/viewer/2022081418/56649d3e5503460f94a17bae/html5/thumbnails/2.jpg)
What is an open-access good and why does it lead to inefficiencies?
• An open access resource is a limited resource that appears to each individual to be limitless.
• Individuals use the resource without taking into account the effect that their use has on others.
• Which property right characteristic fails?
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A full day’s work for an Indian fisherman
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Fish Stock(tons)
Growth in the Fish Stock (tons)
![Page 5: Fisheries: The steady-state model Richard T. Woodward Department of Agricultural Economics Texas A&M University r-woodward@tamu.edu Phone: 979-845-5864](https://reader035.vdocuments.site/reader035/viewer/2022081418/56649d3e5503460f94a17bae/html5/thumbnails/5.jpg)
Fish Stock(tons)
Growth in the Fish Stock (tons)
![Page 6: Fisheries: The steady-state model Richard T. Woodward Department of Agricultural Economics Texas A&M University r-woodward@tamu.edu Phone: 979-845-5864](https://reader035.vdocuments.site/reader035/viewer/2022081418/56649d3e5503460f94a17bae/html5/thumbnails/6.jpg)
Fish Stock(tons)
Growth in the Fish Stock (tons)
![Page 7: Fisheries: The steady-state model Richard T. Woodward Department of Agricultural Economics Texas A&M University r-woodward@tamu.edu Phone: 979-845-5864](https://reader035.vdocuments.site/reader035/viewer/2022081418/56649d3e5503460f94a17bae/html5/thumbnails/7.jpg)
Fish Stock(tons)
Growth in the Fish Stock (tons)
![Page 8: Fisheries: The steady-state model Richard T. Woodward Department of Agricultural Economics Texas A&M University r-woodward@tamu.edu Phone: 979-845-5864](https://reader035.vdocuments.site/reader035/viewer/2022081418/56649d3e5503460f94a17bae/html5/thumbnails/8.jpg)
Fish Stock(tons)
Growth in the Fish Stock (tons)
![Page 9: Fisheries: The steady-state model Richard T. Woodward Department of Agricultural Economics Texas A&M University r-woodward@tamu.edu Phone: 979-845-5864](https://reader035.vdocuments.site/reader035/viewer/2022081418/56649d3e5503460f94a17bae/html5/thumbnails/9.jpg)
Fish Stock(tons)
Growth in the Fish Stock (tons)
Natural Equilibrium
![Page 10: Fisheries: The steady-state model Richard T. Woodward Department of Agricultural Economics Texas A&M University r-woodward@tamu.edu Phone: 979-845-5864](https://reader035.vdocuments.site/reader035/viewer/2022081418/56649d3e5503460f94a17bae/html5/thumbnails/10.jpg)
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a. Suppose there are no fishermen in the lake and the lake's initial stock is one ton. Approximately what would be the stock in each of the next 5 years?
b. Approximately what would be the stock after 100 years (i.e., what is the biological equilibrium)?
![Page 11: Fisheries: The steady-state model Richard T. Woodward Department of Agricultural Economics Texas A&M University r-woodward@tamu.edu Phone: 979-845-5864](https://reader035.vdocuments.site/reader035/viewer/2022081418/56649d3e5503460f94a17bae/html5/thumbnails/11.jpg)
Fish Stock(tons)
Growth in the Fish Stock (tons)
Sustainable yield (Y(E0))
When fishing begins, the growth is taken out (harvested) instead of adding to the stock in the next period
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Fish Stock(tons)
Growth in the Fish Stock (tons)
Y(E0)Y(E1)
More effort
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Fish Stock(tons)
Growth in the Fish Stock (tons)
Y(E0)Y(E1)Y(E2)Y(E3)Y(E4)
Low effort level low
harvests
High effort level low
harvests
Medium effort level high
harvests
![Page 14: Fisheries: The steady-state model Richard T. Woodward Department of Agricultural Economics Texas A&M University r-woodward@tamu.edu Phone: 979-845-5864](https://reader035.vdocuments.site/reader035/viewer/2022081418/56649d3e5503460f94a17bae/html5/thumbnails/14.jpg)
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•Now assume that one boat comes into the fishery after it has reached its biological equilibrium. This boat can, in any given year, harvest 40% of the stock. What would be the stock after harvests and growth next year (assume harvests and growth take place simultaneously).
•Approximately what would the stock be after 4 years?
![Page 15: Fisheries: The steady-state model Richard T. Woodward Department of Agricultural Economics Texas A&M University r-woodward@tamu.edu Phone: 979-845-5864](https://reader035.vdocuments.site/reader035/viewer/2022081418/56649d3e5503460f94a17bae/html5/thumbnails/15.jpg)
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•2 boats can harvest 60% of the stock.
•3 boats can harvest 70% of the stock.
•Approximately what would the stock be after 4 years?
![Page 16: Fisheries: The steady-state model Richard T. Woodward Department of Agricultural Economics Texas A&M University r-woodward@tamu.edu Phone: 979-845-5864](https://reader035.vdocuments.site/reader035/viewer/2022081418/56649d3e5503460f94a17bae/html5/thumbnails/16.jpg)
Quantity of Fishing Effort
Sustainable Harvests (tons)
Maximum Sustainable
Yield (MSY)
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Quantity of Fishing Effort
Sustainable Revenue ($’s)
Revenue
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Quantity of Fishing Effort
Benefits and Costs of Fishing Effort ($’s)
Revenue
Costs
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Quantity of Fishing Effort
Benefits and Costs of Fishing Effort ($’s)
Sustainable Resource
Rents Revenue
Costs
![Page 20: Fisheries: The steady-state model Richard T. Woodward Department of Agricultural Economics Texas A&M University r-woodward@tamu.edu Phone: 979-845-5864](https://reader035.vdocuments.site/reader035/viewer/2022081418/56649d3e5503460f94a17bae/html5/thumbnails/20.jpg)
Quantity of Fishing Effort
Benefits and Costs of Fishing Effort ($’s)
Rents
Revenue
Costs
Ee
R(Ee)
C(Ee)
MR = MC
![Page 21: Fisheries: The steady-state model Richard T. Woodward Department of Agricultural Economics Texas A&M University r-woodward@tamu.edu Phone: 979-845-5864](https://reader035.vdocuments.site/reader035/viewer/2022081418/56649d3e5503460f94a17bae/html5/thumbnails/21.jpg)
Quantity of Fishing Effort
Benefits and Costs of Fishing Effort ($’s)
Revenue
Costs
Ee Eo
Rent elimination in an Open Access Fishery(a.k.a The Tragedy of the Commons)
![Page 22: Fisheries: The steady-state model Richard T. Woodward Department of Agricultural Economics Texas A&M University r-woodward@tamu.edu Phone: 979-845-5864](https://reader035.vdocuments.site/reader035/viewer/2022081418/56649d3e5503460f94a17bae/html5/thumbnails/22.jpg)
Quantity of Fishing Effort
Benefits and Costs of Fishing Effort ($’s)
Rents
Revenue
Costs
Ee Em Eo
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Example
0
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Boats
$'s
Output Price = $1 Cost per boat = $0.95
Sustainable Revenue
Costs
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The Gulf of Nicoya, Costa Rica
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Solutions to the “Tragedy of the Commons”
• Limiting the season or otherwise making fishing more difficult (e.g., unreasonable restrictions on equipment or very short open seasons)
![Page 27: Fisheries: The steady-state model Richard T. Woodward Department of Agricultural Economics Texas A&M University r-woodward@tamu.edu Phone: 979-845-5864](https://reader035.vdocuments.site/reader035/viewer/2022081418/56649d3e5503460f94a17bae/html5/thumbnails/27.jpg)
Quantity of Fishing Effort
Benefits and Costs of Fishing Effort ($’s)
Revenue
Efficient Costs
Em Ec
Inefficiently high Costs
Waste
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Solutions to the “Tragedy of the Commons”
• Limiting the season or otherwise making fishing more difficult
• Taxing effort
![Page 30: Fisheries: The steady-state model Richard T. Woodward Department of Agricultural Economics Texas A&M University r-woodward@tamu.edu Phone: 979-845-5864](https://reader035.vdocuments.site/reader035/viewer/2022081418/56649d3e5503460f94a17bae/html5/thumbnails/30.jpg)
Quantity of Fishing Effort
Benefits and Costs of Fishing Effort ($’s)
Revenue
Costs
Em Ec
Costs after Tax
Ee
Tax Revenue
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Solutions to the “Tragedy of the Commons”
• Limiting the season or otherwise making fishing more difficult
• Taxing effort• Establishing common ownership over
the fishery (fishery cooperatives, 200 mile limit)
• Individual transferable quotas
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Quantity of Fishing Effort
Benefits and Costs of Fishing Effort ($’s)
Rents
Revenue
Costs
Ee Effort level determine by the group or otherwise limited
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Why is Fisheries Management so Difficult?
• Uncertainty (People don’t trust other people’s estimates)
• Politics • Enforcement• The simple models don’t describe a complex world• Bycatch
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The Problem of Bycatch
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World Fish Utilization
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0
20
40
60
80
100
1994 1995 1996 1997 1998 1999 2000
Mil
lio
n M
etr
ic T
on
s
Freshwater
Marine
91.7 92.0 93.5 93.9 87.3 93.2 94.8
Source: FAO 2000 Yearbook of Fishery Statistics: Summary tables
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Summary• Biological growth and biological equilibrium• MSY, MEY, and open-access equilibrium• Open access Common property• Efficient policies: taxation, establishing
ownership over the resource, ITQ’s• Inefficient policies: making life difficult for
fishermen• Fisheries management is difficult,
complicated and important!