Guillermo E. Herrera

Triple benefits from spatial resource management

Standard fishery management models suggest that regulations designed to produce maximum rent should reduce effort – and thus employment – from its open-access level. Using a simple diffusion model, we show that the opposite can be true when the spatial distribution of effort, as well as the total amount of effort, can be controlled. Under certain ecological and economic circumstances that we describe, optimal spatial management can produce “triple benefits” compared to open access: an increase in rent, an increase in standing stock, and an increase in employment.

Uncertainty in the Management of Fisheries: Contradictory Implications and a New Approach

Abstract Fisheries management is complicated in nearly all cases by various types of uncertainty. Numerous economics and fisheries science publications prescribe adjustments to harvest strategies and regulations in the face of uncertainty. The conclusions and recommendations from this body of work are often contradictory, critically dependent on stringent assumptions, and difficult to implement. In this article, we summarize and compare the conclusions of economists, ecologists, and fisheries scientists regarding management of fisheries under uncertainty. We identify common findings and discuss divergent ones. We also attempt to explain why the theoretical prescriptions of this literature have rarely been implemented by fisheries managers. Finally, we discuss management strategy evaluation (MSE), a simulation-based approach designed to identify harvest strategies that are robust to various types of uncertainty and capable of balancing multiple economic, social, and biological objectives. JEL Classification Codes: Q22, D81

Bioeconomic Equilibrium in a Bait-Constrained Fishery

Abstract Despite a growing call for ecosystem-based fishery management, most fisheries are managed independently with little attention paid to linkages such as competition for resources and predator-prey relationships. As the predator-prey modeling literature has shown, such linkages can substantially alter the outcomes of management strategies from those predicted by models naïve to these linkages. In this article, we explore the implications of a linkage between fisheries due to an artificial predator-prey relationship; the use of one harvested species as an input to the harvest technology in another primary fishery whose biological productivity is also positively affected by bait consumption. These anthropogenic, technological, and biological linkages between the fisheries alter both the open-access and rent-maximizing equilibria of the primary fishery. Furthermore, shifts in economic, technological, or biological parameters of either fishery can have significantly different impacts on the bioeconomic equilibria than those predicted by a traditional single-species model. JEL Classification Code: Q22

Dynamic Use of Closures and Imperfectly Enforced Quotas in a Metapopulation

The dynamic efficiency of closures in bioeconomic systems depends upon stock levels and in situ values that evolve over time, and on relative costs of implementation. A model of a harvested metapopulation is presented in which second-best reduction of harvest from open-access levels using input quotas balances monitoring costs against dynamic benefits of mitigating overharvesting. Temporary or permanent closures—though generally still second best—are preferable to quotas under certain conditions, as demonstrated for a representative patch and time period. Interactions between patches are discussed. Numerical solutions illustrate comparative dynamics of closure use, and show their potential benefits in a dynamic regulatory path. Copyright 2007, Oxford University Press.

Benefits of Spatial Regulation in a Multispecies System

Spatial heterogeneity in multispecies systems affects both ecological interactions and the composition of harvest. A bioeconomic model is used to analyze the nonselective harvest of two stocks with generalized ecological interaction and different persistent distributions across two spatial strata. Harvester response to aggregate effort controls is shown to partially dissipate rents relative to the case where the spatial distribution of effort can be specified. Numerical solutions for time paths of spatial (first-best) and aggregate (secondbest) input constraints indicate factors affecting their relative efficiency. In the scenarios studied, benefits of spatial specificity range from 0 to 15% of total net present value (NPV), depending upon the spatial correlation of stocks, their relative growth rates and prices, and the cost gradient across space. The benefits of spatial regulation are also heightened by the presence of ecological interaction, especially predator-prey dynamics.

Ecosystem Externalities in Fisheries

ABSTRACT The economics literature on fisheries has focused primarily on stock externalities and, to a lesser degree, on crowding externalities. Yet for many fisheries, harvesting activities may affect the underlying biological productivity of the fish stock by impacting the forage or habitat quantity or quality. We refer to this as an “ecosystem externality.” Ecosystem externalities may be positive as well as negative. While fishing may damage habitat in ways that reduce productivity, in some cases it may increase food availability and thereby increase productivity of the target species of a fishery. Extending the model of Smith (1968), we use three equations to characterize dynamics of a resource stock, profit-maximizing individual behavior, and vessel entry/exit. We use this simple model to show how ecosystem externalities, in conjunction with stock externalities and crowding externalities, affect system dynamics, open-access equilibria, and optimal fishery regulation implemented through a tax. JEL Code: Q22, Q57.

A Stochastic Bioeconomic Model with Research

This paper provides an incremental extension of a stochastic renewable resource model (Pindyck 1984) to include population dynamics research; i.e., the rate of accrual of information regarding the stochastic evolution of the stock, as a dynamic choice variable. While Pindyck models variance in stock growth as an exogenous parameter, our formulation endogenizes this variance and characterizes the impact of scientific information accrual on both the harvest decision and the present value of rents resulting from harvest activity. We illustrate the theoretical existence of an internal optimum in research effort using a numerical example.

High-seas fish wars generate marine reserves

Significance Marine reserves—areas where fishing is prohibited—have been implemented to conserve fish stocks and their habitats. They have been established in near-shore fisheries, where a single state (or “sole owner”) regulates the distribution of fishing effort. Modeling has shown that, under some conditions, the sole owner may also use closed areas to maximize sustainable profit. Here, we show that reserves may also play a role in fisheries management on the high seas, where a limited number of states compete in a noncooperative fishing game. Our theoretical analysis complements recent empirical studies of high-seas protected areas and is relevant in other management contexts characterized by a limited number of harvesters. The effective management of marine fisheries is an ongoing challenge at the intersection of biology, economics, and policy. One way in which fish stocks—and their habitats—can be protected is through the establishment of marine reserves, areas that are closed to fishing. Although the potential economic benefits of such reserves have been shown for single-owner fisheries, their implementation quickly becomes complicated when more than one noncooperating harvester is involved in fishery management, which is the case on the high seas. How do multiple self-interested actors distribute their fishing effort to maximize their individual economic gains in the presence of others? Here, we use a game theoretic model to compare the effort distributions of multiple noncooperating harvesters with the effort distributions in the benchmark sole owner and open access cases. In addition to comparing aggregate rent, stock size, and fishing effort, we focus on the occurrence, size, and location of marine reserves. We show that marine reserves are a component of many noncooperative Cournot–Nash equilibria. Furthermore, as the number of harvesters increases, (i) both total unfished area and the size of binding reserves (those that actually constrain behavior) may increase, although the latter eventually asymptotically decreases; (ii) total rents and stock size both decline; and (iii) aggregate effort used (i.e., employment) can either increase or decrease, perhaps nonmonotonically.

Aligning Economic and Ecological Priorities: Conflicts, Complementarities, and Regulatory Frictions

Four key policy challenges, framed here as dichotomies, are commonly associated with attempts to improve the use of natural resources in the socioecological commons. These dichotomies present tradeoffs when addressing market failures and in general seem to suggest the need to settle for second-best outcomes rather than first-best outcomes identified in stylized models. Citing examples, we argue that these models, while illustrating these dichotomies, also suggest means for circumventing them, and perhaps provide a degree of optimism about prospective outcomes in socioecological systems.