Discussion Papers, Department of Finance and Management Science, Norwegian School of Economics (NHH)
No 2009/6:
Continuous harvesting costs in sole-owner fisheries with increasing marginal returns
Jose M. Maroto ()
, Manuel Moran ()
, Leif K. Sandal ()
and Stein I. Steinshamn ()
Abstract: We develop a bioeconomic model to analyze a sole-owner
fishery with fixed costs as well as a continuous cost function for the
generalized Cobb-Douglas production function with increasing marginal
returns to effort level. On the basis of data from the North Sea herring
fishery, we analyze the consequences of the combined effects of increasing
marginal returns and fixed costs. We find that regardless of the magnitude
of the fixed costs, cyclical policies can be optimal instead of the optimal
steady state equilibrium advocated in much of the existing literature. We
also show that the risk of stock collapse increases significantly with
increasing fixed costs as this implies higher period cycles which is a
quite counterintuitive result as higher costs usually are considered to
have a conservative effect on resources.
Keywords: Bioeconomic modelling; Stock collapse; Fixed costs; Pulse fishing; Cyclical dynamics; Increasing marginal returns; (follow links to similar papers)
JEL-Codes: Q57; (follow links to similar papers)
36 pages, September 15, 2009
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