in honour of dr colin clark onference ubc, may
TRANSCRIPT
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Discount Rates in Small‐Scale FisheriesDiscount Rates in Small Scale FisheriesLOUISE TEH
IN HONOUR OF DR. COLIN CLARK CONFERENCEUBC MAY 15 2012UBC, MAY 15, 2012
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CORALREEFS
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Reef Fisheries• Small‐scale, multi‐species & multi‐gear;• Extensive overexploitation;• Extensive overexploitation;• Over 55% of coral reefs worldwide threatened by overfishing andthreatened by overfishing and destructive fishing (Burke et al. 2011).
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Reef Guardian
Threatened coral reef species
Chris Johnson, OdysseyReef Guardian
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Discount rates and fisheries sustainabilityfisheries sustainability
How willing are fishers to sacrifice theirt fi h b fit i d t jcurrent fishery benefits in order to enjoy
higher benefits in the future?g
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Discount rates and fisheries
• Private discount rate measures one’s willingness to f i di b fi i d j fforgo immediate benefits in order to enjoy future, bigger benefits;Di ti ff t l t t i bilit f• Discounting affects long term sustainability of fisheries resources (Clark 1973, Sumaila 2004);
• Few empirical studies:• Few empirical studies:– High discount rates increased intensity of violating fisheries regulations (Akpalu 2008);g ( p );
– Low discount rates associated with less intense fishing pressure (Fehr & Liebbrandt 2008).
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Research QuestionsResearch Questions
1 What are the private discount rates of small‐1. What are the private discount rates of smallscale fishers?
2 Under what socio economic conditions do2. Under what socio‐economic conditions do fishers have low discount rates?
3 A di fl i f fi h3. Are discount rates reflective of fishery exploitation status?
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Study site 1
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Study site 2
A li
Fiji
Australia
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Fishing Villages
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Discount rates of fishers in open access d di i ll d f fi h i
Open access (Sabah):
and traditionally managed reef fisheries
Open access (Sabah):• No assurance of future benefits from the fishery; • Forced to entirely discount the future i e use a• Forced to entirely discount the future, i.e., use a discount rate of infinity (Clark, 1990).
Customary marine tenure (Fiji):Customary marine tenure (Fiji):• Traditional management of fishing grounds;• Stewardship of marine resources lower discount• Stewardship of marine resources – lower discount rate.
Teh et al. (submitted)
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Eliciting discount rates
• Semi‐structured interviews: – 75 interviews in Sabah (April/May 2009)
– 45 interviews in Fiji (May/June 2008)
• Binary choice series using hypothetical payments:– Choose between an immediate, smaller payment or delayed, largerpayment
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Estimating Discount RatesNow ($)
1 month ($)
Discount rate (annual%) Discount Function:( ) ( ) (annual%)
100 105 29
100 110 86 di t t
Discount Function:
100 115 141
100 120 193
r = discount ratey = present value x = future value
100 125 243
100 130 291
t = time delay
100 135 337
100 140 381
100 145 424
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Discount rates of fishers in Sabah for 1 month delayy
M 265% 33Mean = 265% 33Median = 29%
cyre
quen
cFr
Annual discount rate (%)
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Discount rates of fishers in Fiji for 1 month delayy
Mean = 208% 27Mean = 208% 27Median = 121%
cyre
quen
cFr
Annual discount rate (%)
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Proportion of fishers choosing each choice i b i
Sabah Fiji
option by site
Sabah (%)
Fiji (%)
‘Impatient’ 30 20Impatient 30 20
‘Patient’ 51 27
Other 19 53
Patience proxy(=ri/r )
0.39* 0.44
( ri/rmax)*p<0.05
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Percentage of respondents at each village who chose the ‘patient’ optionwho chose the patient optionVillage Site %Sibogo Balak Banggi 14Sibogo Balak Banggi 14Mabul Semporna 20Dogoton Banggi 38Dogoton Banggi 38Hampalan Laut Semporna 40Damaran Banggi 67ggOmadal Semporna 67Batu Sireh Banggi 70Sibogo Air Banggi 71Manawali Banggi 83Maligu Banggi 100
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Defining a low discount rate
Now ($)
1 month ($) Low discount rate = ($) ($)
100 105
100 110
Choosing smallest future payment offered100 110
100 115
100 120
offered
All other choices = non low discount100 120
100 125
100 130
non-low discount rate
100 130
100 135
100 140100 140
100 145
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Logistic regression model
Identify which socio‐economic factors predict the probability that a fisher chooses a low discount ratea fisher chooses a low discount rate
WZXY
Y = Probability of choosing a low discount rateX, Z and W = matrices of demographic, socio-economic and location variableslocation variables
3 models: (i) pooled (n=118)(ii) Sabah only (n=73)(iii) Fiji only (n=45)
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Prevalence of low discount rates among ll l fi hsmall‐scale fishers
ents
resp
ond
% o
f r
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Logistic regression output
Significant predictors of low discount rates among fishers
Variable Pooled Sabah FijiVariable Pooled Sabah Fiji
Protection + +Site +Boat ownership + ‐Relative catch ‐ +Relative catch ‐ ++ Increases likelihood of a fisher choosing a low discount rate‐ Decreases likelihood of a fisher choosing a low discount rate
Teh et al. (2011) Sustainability
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Coral reefs worldwide
Coral reefs
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Economics of overexploition
Theory: Even under restricted access, the sole y ,owner of a fishery has an incentive to deplete the resource if their discount rate satisfies the condition
> 2r > 2r where r = intrinsic population growth rate of h fi h k (Cl k 1973)the fish stock (Clark 1973).
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Data
1. EconomicDi t tDiscount rates
• Managers = official discount rate ()• Fishers = private discount rate ( )• Fishers = private discount rate (p)
2 Biological2. BiologicalIntrinsic growth rates
• Species level (r )Species level (rs)• Fishery level (rf)
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Species % of catch 0.5 5
rs
0.6 20
1 0 101.0 10
0.4 15
0.5 5 0.875 yr-1
Fishery level rf
0.2 15
1.8 22
2.2 52.2 5
0.3 3
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Comparing discount rates to lexploitation status
Status* Official discount rate ()rate ()
Underexploited < rfOverexploited > rfDepleted > 2rDepleted > 2rfrf : Fishery level intrinsic growth rate* Source: Newton et al. 2007 Current Biology
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Inferring private discount ratesInferring private discount rates
Status Private discount rate (p)( p)
Underexploited 0.29* < p < rfO l i d 2Overexploited rf < p< 2rfFully exploited p= rfy p p f* Minimum discount rate from Fiji and Sabah case studies
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Fishery level rff)
e pe
r yr (
r fro
wth
rate
trin
sic
gr
Mean= 0.88 ±0.02
FijiIn FijiSabah
Fishery case
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Fishery level rfr f) Mauritius
Rabbitfish
e pe
r yr (
r MauritiusPhilippines
Parrotfishrow
th ra
t
Surgeonfish
Snapper
ntrin
sic
g
Grouper
In
BahamasTurks & Caicos
Fishery case
Caicos
Teh et al. (submitted)
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Official discount rates
1.8
2
ate
1.4
1.6
scou
nt ra
0 8
1
1.2
nnua
l dis
0.4
0.6
0.8
Offi
cial
an
0
0.2
Fishery cases
O
Fishery cases
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Official discount rate vs. fishery rf
1 8
2
y r f
1.4
1.6
1.8
/ Fis
hery
1
1.2Fishery rf
Officialount
rate
/
0.6
0.8Official discount rate
ial d
isco
0.2
0.4
Offi
c
0Fishery cases
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Inferred private discount rates
Caribbean 102%Southeast
O i 89%
Southeast Asia 145%Indian
Ocean 142%
Sabah 110%
Fiji 104%
Oceania 89%Sabah 110%
Overall mean = 107%
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Official vs. private discount rates
2 5
3
2
2.5
Privatent ra
te
1.5
Private discount rate
Official discountdi
scou
n
1
discount rate
Ann
ual
0.5
0Fishery cases
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Concluding Remarks
Need to start paying attention to fishers’ discount ratesA k l d fi h ’ h t ti ti– Acknowledge fishers’ short time perspective
– Better understanding about why fishers discount the way they doy
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ACKNOWLEDGEMENTS
Rashid Sumaila Colin Clark Mike Meitner Dirk ZellerRashid Sumaila, Colin Clark, Mike Meitner, Dirk Zeller
In the field: Lydia Teh, Prof. Dr. Ridzwan Abdul Rahman, UMS Seaweed Project staff (Banggi) ,WWF team (Kudat & Semporna), Nanise Kuridrani, Vily Tuiwakaya and Fiji Fisheries Department
Funding: SSHRC, Kingfisher Foundation, Cosmos International Graduate Travel Award (UBC)( )
All the fishers who made this research possible… Maksukul, Terima kasih,Vinaka
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Estimating intrinsic population hgrowth rate
• Based on Euler‐Lotka method (McAllister et alBased on Euler Lotka method (McAllister et al. 2001)
• Solve for r iteratively using a numerical i i i i f iminimisation function
• Assume Beverton‐Holt recruitment function, expressed as a function of the steepness parameter h