Stein Ivar Steinshamn

How to Improve the Management of Renewable Resources: The Case of Canada's Northern Cod Fishery

The paper examines howan easy-to-apply optimal feedback rule can be used to solve for optimal levels of exploitation of a renewable resource. Using data from Canadas northern cod fishery, the optimal feedback rule is used to derive optimal levels of exploitation for the years 1962–91 under different discount rates, alternative model specifications, and parameter assumptions. The optimal feedback rule indicates that over much of the period the fishery was economically overexploited and, given the stock development that actually took place, a harvesting moratorium should have been instituted three years earlier than when it was introduced. The results show how the use of a simple and flexible optimal rule by managers of renewable resources can generate substantial gains. Copyright 2000, Oxford University Press.

Optimal Feedback Controls: Comparative Evaluation of the Cod Fisheries in Denmark, Iceland, and Norway

The economic efficiencies of the Danish, Icelandic, and Norwegian cod fisheries are examined. For this purpose, nonlinear aggregate models of these fisheries are constructed. Comparing the calculated optimal harvest and biomass quantities with the actual fisheries provides a measure of the degree of efficiency in these fisheries. The comparisons confirm that the cod harvesting policies of these countries have been hugely inefficient in the past. It appears that inefficiency has been increasing over the last three to four decades, even after TAC regulations replaced open access, indicating that the management policies adopted by all three countries have failed to cure overfishing. Copyright 2004, Oxford University Press.

How to set catch quotas: Constant effort or constant catch?

Abstract This paper considers whether the total allowable catch from a fish stock should be a fixed annual quantity or based on constant fishing effort. It consists of two parts, a theoretical part and an empirical part based on data from the Arcto-Norwegian cod stock. In the theoretical part it is shown that realistic cost and revenue functions have opposite effects on whether a constant quota or a constant effort yields the highest expected profit. A concave revenue function implies that a constant quota will be preferable, while a stock-dependent unit cost of landed fish has the opposite implication. The empirical part investigates how large the difference between the average profit yielded by the two strategies is likely to be, on the basis of some stylized facts about the Arcto-Norwegian cod stock. The size of this stock fluctuates considerably over time, due mainly to fluctuations in the size of year classes. Spectral analysis indicates cyclical movements, and so a sine curve was used to generate recruitment cycles. The difference in average profit yielded by the two harvest strategies is very small in most cases, or of the order of 1–2%. This result is relatively robust with respect to alternative specifications of the cost and the revenue functions, but a maximum difference of 20% was produced by a non-stock-dependent unit cost of fish and a kinked revenue function, where catches exceeding a certain quantity are worthless.

A Conceptional Analysis of Dynamics and Production in Bioeconomic Models

Harvesting functions and stock dynamic equations in age-structured bioeconomic models are generalized in order to incorporate density dependence. Using this generalization, anything from completely uniformly distributed fish to extreme schooling can be analyzed. The classical Beverton--Holt model comes out as a special case of the generalized model. The generalization can be applied both for simulation as well as for optimization purposes given appropriate software. Conceptual analysis indicates that pulse fishing seems to become less and less economically profitable as we move from uniformly distributed fish to schooling species. This has important implications for how fish stocks ought to be managed. Copyright 2010, Oxford University Press.

Implications of Harvesting Strategies on Population and Profitability in Fisheries

The effects of different harvesting strategies on the mean and variation in size of the fish stock and net revenues are investigated. The strategies analyzed are constant catch, constant effort, and constant escapement. A Gordon-Schaefer model affected by cyclical disturbances and stochastic disturbances is applied. Factors explaining the differences between the strategies are the length of the recruitment cycles and the presence of stochasticity. With short recruitment cycles the constant catch strategy somewhat surprisingly produces least variation and highest mean with respect to stock size and net revenue, while constant escapement produces most variation and lowest mean. With longer recruitment cycles or pure stochasticity, constant escapement produces highest average stock size and net revenue as well as lowest variation in the stock size, but not in the net revenue. Constant effort is in most cases ranked between the other two strategies.

Implications of a nested stochastic/deterministic bio-economic model for a pelagic fishery

Abstract Use is made of an economically optimal feedback rule to determine optimal levels of exploitation of a pelagic fish species. Data from the southern bluefin tuna fishery for the years 1960–1996 are utilised to apply this rule to aggregated deterministic and stochastic models of population dynamics. Comparison of the rule-based results with historical records indicates that over much of the period the fishery was economically overexploited and a harvesting moratorium could have been imposed to improve economic returns from the fishery and to allow stock recovery.

Optimal Steady States and the Effects of Discounting

A simple expression for finding and characterizing the optimal steady state of a general dynamic optimization problem is derived. This expression is easy to interpret and easy to apply for various purposes as, for example, to analytically investigate the effect of the discount rate upon optimal steady state stock levels. It is shown that an increase in the discount rate may result in higher optimal stock levels even in the one-dimensional (single species) case in nonlinear models. An important result is that if demand is inelastic at the optimal steady state, a higher discount rate will unequivocally imply higher standing stock(s). Increasing marginal cost of harvest will further strengthen this result. In the multidimensional case it is demonstrated that an increased discount rate may result in higher optimal stock levels for all stocks included in the model.

Rescuing the Prey by Harvesting the Predator: Is It Possible?

A predator–prey model is used to analyse the case where the prey has been overexploited for a while and therefore is threatened by extinction even along the optimal harvesting path due to depensation in the biological model. It is assumed here, however, that extinction is unacceptable for non-economic reasons. Various sub-optimal rescue operations involving increased harvest of the predator and reduced, or zero, harvest of the prey are therefore considered. The question is how and when it is possible to rescue the prey from extinction by departing from the optimal path. Such sub-optimal policies are not always feasible. If they are feasible, they imply certainly reduced profits and may even produce negative profit. The objective of this chapter is to find the criteria for when a rescue operation is feasible and to explore the dynamics of this situation.

Economic Benefits of Multi-Species Management: The Pelagic Fisheries in the Northeast Atlantic

ABSTRACT Optimal management of herring, mackerel, and blue whiting in the North East Atlantic is analyzed. The main motivation is to quantify the potential gain from implementing multispecies management compared to traditional single-species management. The objective is to maximize discounted net revenue; in other words a sole-owner perspective. The results are derived from an empirically based surplus growth type of model with three species. The biological interaction in the model is mainly competition for food. One result is that discounted net revenue could have been around 25% higher if the stocks had been optimally managed from a multi-species perspective. JEL Codes: Q22, Q34, Q57.

Do Species Interactions and Stochasticity Matter to Optimal Management of Multispecies Fisheries

The multispecies fisheries management looks at a bigger picture in addressing the long-term consequences of present decisions. This implies an ecosystem management that includes a number of species and their physical, biological and economic interactions. These interactions make the growth of resources stochastic and increase complexity in understanding stock dynamics and optimal catch for such a stochastic and multiple stocks´ system. To address the issue of identifying optimal catch of stochastically growing multi stocks, we have formulated and applied a time-continuous stochastic model. The model contributes to multispecies bioeconomic management of marine ecosystems. An application of model in a predator-prey relationship in Barent Sea revealed that the optimal catch for stochastically growing stocks in a multispecies interaction model is different from the deterministic model.