Introduction to Fisheries Economics

Introduction to Fisheries Economics by the use of Mathematica programming Arne Eide Copyright c 2017 Arne Eide Published by Publisher book-website.com Licensed under the Creative Commons Attribution-NonCommercial 3.0 Unported License (the “License”). You may not use this file except in compliance with the License. You may obtain a copy of the License at http://creativecommons.org/licenses/by-nc/3.0. Unless required by applicable law or agreed to in writing, software distributed under the License is distributed on an “as is” basis, without warranties or conditions of any kind, either express or implied. See the License for the specific language governing permissions and limitations under the License. First printing, March 2017 Contents 1 Introduction ...................................................7 I Harvesting technology and population dynamics 2 Fishing effort ................................................. 11 2.1 Requirements of fishing 11 2.2 How to measure fishing effort? 11 2.3 The production of fishing effort 12 2.4 Introduction to elasticities 13 2.5 The Cobb-Douglas function 14 2.6 The CES function 15 2.7 Elasticity of scale 16 3 Fish catch production .......................................... 19 3.1 Catch production 19 3.2 Catch as a method of stock assessment 19 3.3 Cobb-Douglas catch production 23 3.4 Properties of fishing gears 23 3.5 Exercises 23 4 Population dynamics ........................................... 25 4.1 Basic principles 25 4.2 Classical surplus growth models 25 4.3 Depensatory growth 31 4.4 Age structured model 34 4.5 Exercises 39 5 The concept of equilibrium harvest .............................. 41 5.1 Equilibrium harvest 41 5.2 Surplus production models 42 5.3 Age structured models 46 5.3.1 Numbered List.................................................... 47 5.4 Remarks 47 5.5 Corollaries 47 5.6 Propositions 47 5.6.1 Several equations.................................................. 47 5.6.2 Single Line....................................................... 47 5.7 Examples 47 5.7.1 Equation and Text.................................................. 47 5.7.2 Paragraph of Text.................................................. 48 5.8 Exercises 48 5.9 Problems 48 5.10 Vocabulary 48 II Fisheries economics 6 The economics of catch production ............................. 51 6.1 The economics of effort production 51 6.2 Exercises 54 7 Economic growth .............................................. 55 7.1 Labour creates capital 55 7.2 Neoclassical Economic Growth Theory 55 7.3 Exercises 56 III Fisheries management 8 Economic growth .............................................. 61 8.1 Labour creates capital 61 8.2 Table 61 8.3 Figure 61 Bibliography .................................................. 63 Articles 63 Index ......................................................... 65 1. Introduction Fishing, hunting and gathering food represent the oldest human forms of life, where people depended on wild food for subsistence. While the importance of hunting and gathering wild food decreased after the introduction of agriculture more than ten thousand years ago, fishing has over the last hundred years been increasingly more important as a source of food and wealth for millions of people around the world. Fishing is an economic activity to produce food for own consumption, but today also for commercial markets and for the purpose of recreation and pastime. These activities often coexist but they could also be regarded as stages in economic and cultural developments, starting with the subsistence fishery, before developing a commercial industry and recreational use of the natural resource. The aim of the earliest stage, the subsistence fishing, was to feed own household. Early barter economy allowed fish products to be traded but as a perishable product there were limits for the trade-ability of fish. Methods to preserve fish by drying, salting and smoking it, which contributed in developing fish markets where stored fish could be sold, were discovered and developed. Infrastructure then become the major obstacle, transporting the fish to the markets in the large cities demanded storing capacity, roads, vehicles for transport, but also organisations, agreements and security for those investing in the trade. Increasing trade resulted in wealth creations, first in the business of trade and later also increasingly among fishers. A consequence of economic growth is that labour becomes relatively more expensive and capital more available, hence labour is substituted by capital as a consequence of economic growth, also in the fishing industry. The aim of recreational fishing, the most recent utilisation of fish stock resources, is not primarily to produce catch, although the catch also often is utilised. The ultimate goals are however the adventure, utilising and enjoying the natural environment, sensing 8 Chapter 1. Introduction peaceful nature and experiencing relaxing activities. Recreational fishing has developed to become a major industry both in terms of accommodating the fishers and production of fishing tackle and equipment. Fishing takes different forms in different societal and economic contexts. This book aims to discuss the economic activity of fishing through formal models, also including the dynamics of the utilised fish stocks. The analysis are based on basic microeconomic principles and standard theories of fisheries economics are presented. The book includes however also some attempts of employing methodology which are more rarely seen in other bioeconomic textbooks. The book offers an introduction to programming in the Wolfram Language, presenting a number of relevant examples of how to use the software Mathematica as a tool in fisheries economics. Harvesting technology I and population dynamics 2 Fishing effort ........................ 11 2.1 Requirements of fishing 2.2 How to measure fishing effort? 2.3 The production of fishing effort 2.4 Introduction to elasticities 2.5 The Cobb-Douglas function 2.6 The CES function 2.7 Elasticity of scale 3 Fish catch production ................. 19 3.1 Catch production 3.2 Catch as a method of stock assessment 3.3 Cobb-Douglas catch production 3.4 Properties of fishing gears 3.5 Exercises 4 Population dynamics ................. 25 4.1 Basic principles 4.2 Classical surplus growth models 4.3 Depensatory growth 4.4 Age structured model 4.5 Exercises 5 The concept of equilibrium harvest .... 41 5.1 Equilibrium harvest 5.2 Surplus production models 5.3 Age structured models 5.4 Remarks 5.5 Corollaries 5.6 Propositions 5.7 Examples 5.8 Exercises 5.9 Problems 5.10 Vocabulary 2. Fishing effort 2.1 Requirements of fishing Fishing is utilisation of a natural resource, the fish stock. In order to capture fish and other seafood products, proper catching methods have to be used. Some resources (shellfish, crabs, clams, etc.) could easily be picked on the beach or in shallow water when available, while other resources demand more elaborated catching techniques. During the thousands of years humans have been utilising fish stocks for food, a large number of capturing methods have been developed. Some of them have proved to be efficient and are still in use, while others have been left behind. Today a large number of different catching technologies are in daily use, some of them known from ancient time while others only have been around for a few decades. Angling is among the oldest fishing methods we know and is still used in commercial fisheries around the world. Hand line and long line fishing are the most important angling methods. Different types of fishing nets also have been in use since ancient times. Nets are used in modern fisheries as gill nets and in more sophisticated net constructions, as purse seines, Danish seines and trawling gears. 2.2 How to measure fishing effort? Fishing effort could be regarded as a commodity that could be produced in many different ways and in different quantities. As discussed above, it exists a vast number of different methods of catching fish. Their relative efficiency depends on a number of factors which we will discuss elsewhere in the book. It is not obvious how to measure fishing effort, units that appear to be useful in some fisheries may be useless in others. In a fishery where the fishing fleet is fairly homogeneous, fishing effort may be measured in terms of 12 Chapter 2. Fishing effort Gill net Purse seine Trawl Figure 2.1: Some standard fishing gears used in modern fisheries (Source: Wikimedia commons) • Number of vessels per year • Number of fishing hours, days or trips • Towing hours (for trawl fisheries) In the more common cases of heterogeneous fleets, useful fishing effort measures may be • Total numbers of engine horse power units • Total number of hooks (for hand line and long line gears) • Total number of nets (for gill net fleets) • Sum of vessel lengths • Sum of vessel tonnage Each case must be evaluated on its own based on its own properties. The measurement method has high quality if all units are measured by the same scale, also over time. If performance data is available the best measure may be found by standardising an effort unit based on combinations of several of the measures shown in the bullet points above. Summary 2.2.1 — Units to measure fishing effort. There is no standard unit for the measurement of fishing effort. 2.3 The production of fishing effort In general all fishing effort (E) is produced in production processes involving labour (L) and capital (K), E(L,K) = f(L,K) (2.1) where labour and capital may substitute each other, producing the same amount of effort. That means that the same fishing effort may be produced by a large quantity of labour and a small quantity of capital as by a small quantity of labour and a large quantity of capital. 2.4 Introduction to elasticities 13 The variables Labour (L) and capital (K) in Equation 2.1 are referred to as production input factors, while the fishing effort (E) is the output from the production process. Figure 2.2 shows three possible shapes Equation 2.1 may have. Each of the three cases gives a constant production of fishing effort for different combinations of labour and capital.

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