John P. Nichols

Optimum Effort and Rent Distribution in the Gulf of Mexico Shrimp Fishery

Traditional methods used to estimate fishing effort that maximizes rent to an open access resource have almost universally assumed all costs are directly proportional to effort. When crews receive a fixed share of gross returns, labor costs are proportional to catch; hence, rent accrues to crews as well as vessel owners under limited entry. A model that allowed costs to be proportional to effort and catch was applied to the Gulf of Mexico shrimp fishery. This study indicates that traditional analysis would result in management schemes that overtax vessels and ignore rent accruing to crews.

ON THE ESTIMATION OF ADVERTISING EFFECTS FOR BRANDED PRODUCTS: AN APPLICATION TO SPAGHETTI SAUCES

Using IRI Infoscan data pertaining to six types of spaghetti sauces and employing an extension of the demand systems framework developed by Duffy, estimates are obtained of own-price, cross-price, and total expenditure elasticities as well as own- and cross-product advertising elasticities. We augment the Duffy model through the use of a polynomial inverse lag mechanism to deal with the carryover effects of advertising. We also account for the impacts of features in newspaper fliers, in-store displays, and coupons. Advertising efforts by industry leaders in spaghetti sauce produce positive own-advertising elasticities (ranging from -.000003 to -.0094). Own-price elasticities are in the elastic range, and nearly all compensated cross-price effects are positive, indicative of Hicksian substitutes.

Dynamic Modeling of the Eastern Gulf of Mexico Shrimp Fishery

The impact of alternative management schemes on the shrimp fishery of the eastern Gulf of Mexico is analyzed and compared to a baseline using simulation techniques. The fisherys biological and economic functions are modeled including intraseasonal shrimp growth rates, differences in demand for shrimp by size, and a heterogenous fishing fleet. Using consumer and producer surplus techniques, new fishing regulations appear socially optimal compared to the baseline. A rent-maximization scheme increases social surplus to its highest level. However, applying such a scheme to one part of the total Gulf of Mexico shrimp fishery is not recommended.

APPLICATION OF A BIO-ECONOMIC-ENGINEERING MODEL FOR SHRIMP MARICULTURE SYSTEMS

The culture of marine invertebrates, collec- Williams). Previous economic studies involving tively termed mariculture, has received much penaeid shrimp mariculture, although directed attention as a new and potentially lucrative toward an immediate need and research goal, industry. Much research has been devoted to have failed to consolidate biological, economic, molluscs (oysters, clams, and mussels) and and engineering relationships and principles crustaceans (shrimp, crawfish, crabs, and lob- into a comprehensive model capable of sters) (Bardach, Ryther, and McLarney). In performing analyses on an unlimited number particular, effort has been directed to the de- of system designs and a continuum range of velopment of a technologically and commer- facility sizes. cially feasible penaeid shrimp mariculture Computerized models designed for applicascheme (Broom; Mock and Murphy; Neal and tion in technological assessment and determinLatapie; Parker and Conte; Wheeler). Results ing direction of future research in aquaculture of extensive research efforts show promise have been developed for other systems (Allen that the technological feasibility of penaeid and Johnston; Polovina; Schurr, Allen, and shrimp farming in Gulf coastal regions of the Botsford). Though biologically oriented in United States is near to being a reality. terms of the output generated and audiences Before significant commercial investment in addressed, these models demonstrate a clear shrimp mariculture will be realized, however, step foward in analytical power in the direction economic relationships in addition to technical of assessing the status of economic feasibility. considerations must be better understood. In- Therefore, considering the purposes, applicavestors will initially want to know the vital tions, and limitations of previous modeling biological and environmental elements of a studies in aquaculture and the status of the shrimp culture system and how variability in industry, we see a distinct need for a modeling those elements affects production. Investors tool which will consolidate biological, economic, will also want to know how much control can and engineering relationships and principles. A be exercised over these critical elements and at model of this scope is needed to provide a what cost. For penaeid shrimp mariculture to framework applicable to most land-based maribecome an attractive commercial investment, culture operations. The more extensive analythese questions must be answered and the sis of this type of model will aid the potential potential economic feasibility of such opera- mariculturist (as well as creditors) in allocating tions must be established and readily de- financial resources and assessing investment monstrable to potential investors and creditors opportunities. More specifically, because during their decision-making process. shrimp mariculture is a growing new investEconomic, investment, and feasibility ment opportunity with high risk, economies of analyses have been performed on a variety of size need to be identified. That information will aquacultural systems other than penaeid enable an investor or creditor to identify the shrimp mariculture (Gibson and Wang; size of system that captures most of the econoHerrick and Baldwin; MacDonald, Meade, and mies of size and thus to keep risk capital as low Gates; Roberts and Bauer; Shang; Shang and as possible. Like previous modeling efforts, Fujimura; Smith). Studies of shrimp maricul- this type of model will also provide guidelines ture have been limited to itemizing fixed and for the direction of future research and assessvariable costs and calculating per units costs ment of advancing technology. of production for a given system or limited We describe the development of a bio-ecorange of system sizes. Financial analyses have nomic-engineering (BEE) model for penaeid been performed on given hypothetical opera- shrimp mariculture and its application to a tions defined by a rigid set of assumptions specific system. The tool is introduced in pri(Anderson and Tabb; Phillips and Gillespie; marily an application context. 1

An Evaluation Of Market Order Grade Changes Using Covariance Analysis

Market orders authorized under both State and Federal legislation have long been employed to regulate the marketing of many agricultural products, especially fruits and vegetables. While their purposes vary and controls provided for differ, one provision that is common to a large number of orders allows the establishment of minimum standards of grade, maturity, or other characteristics of quality in the marketing of an agricultural commodity. These standards are usually set by the marketing order committee composed of producer and shipper members of the industry, subject to the approval of the Secretary of Agriculture.