Tuong Nhu Che

Technical efficiency effects of input controls: evidence from Australia's banana prawn fishery

This paper provides the first ex post estimates of the effects of input controls on technical efficiency in a fishery. Using individual vessel data from the northern prawn fishery of Australia for the years 1990–1996 and 1994–2000, stochastic production frontiers are estimated to analyse the efficiency impacts of input controls on engine and vessel size. The results indicate that technical efficiency is increasing in a measure of vessel size and engine capacity that was controlled by the regulator from 1985 to 2001, and decreasing in an unregulated input, gear headrope length. The study shows that fishers have substituted from regulated to unregulated inputs over the period 1990–2000 and technical efficiency has declined coincident with increasing restrictions on vessel size and engine capacity. The decline in technical efficiency indicates that the goal of the regulator to increase economic efficiency has not been realized.

Technology choice and efficiency on Australian dairy farms

Deregulation of the Australian dairy industry, specifically the removal of price subsidies to ‘market milk’, as well as ongoing drought in many dairy regions, has placed considerable pressure on farm cash income and a search for ways in which dairy farms can be made to operate more efficiently. Using traditional farm survey data and a unique biannual data set on farm technology use, this paper estimates a stochastic production frontier and technical efficiency model for dairy farms in New South Wales and Victoria, determining the relative importance of each input in dairy production, the effects of key technology variables on farm efficiency, and overall farm profiles based on the efficiency rankings of dairy producers. Results show that production exhibits constant returns to scale and although feed concentration and the number of cows milked at peak season matter, the key determinants of differences in dairy farm efficiency are the type of dairy shed used and the proportion of irrigated farm area. Overall farm profiles indicate that those in the ‘high efficiency group’ largely employ either rotary or swing-over dairy shed technology and have almost three times the proportional amount of land under irrigation.

Maximizing Profits and Conserving Stocks in the Australian Northern Prawn Fishery

The Australian Northern Prawn Fishery (NPF) is one of the few that has adopted a dynamic version of a ‘maximum economic yield’ (MEY) target, and, on this basis, the fishery is undergoing a process of substantial stock rebuilding. This study details the bioeconomic model used to provide scientific management advice for the NPF, in terms of the amount of allowable total gear length in the fishery, for both the MEY target and the path to MEY. It combines the stock assessment process for two species of tiger prawns with a specification for discounted economic profits, where the harvest function in the profit equation is stock-dependent. Results for the NPF show a substantial ‘stock effect’, indicating the importance of conserving fish stocks for profitability. MEY thus occurs at a stock size that is larger than that at maximum sustainable yield, leading to a ‘win-win’ situation for both the industry (added profitability) and the environment (larger fish stocks and lower impact on the ecosystem). Sensitivity results emphasize this effect by showing that the MEY target is much more sensitive to changes in the price of prawns and the cost of fuel, and far less so to the rate of discount.

Capacity Reduction, Quota Trading and Productivity: The Case of a Fishery

We present the first ex post study that quantitatively analyses the effects of a licence buy-back and enhanced quota trading on the profitability and productivity of individual vessels in a fishery. Using firm-level data and a profit index decomposition method, we find that small and large vessels and three different trawler fleets all experienced substantial productivity gains in the year immediately following a licence buy-back and the establishment of a quota brokerage service. The apparent ongoing benefits of the buy-back and increased quota trading over the sample period are in stark contrast to the generally unfavourable long-term outcomes commonly associated with vessel buy-backs in input-controlled fisheries.

Incentives and static and dynamic gains from market reform: rice production in Vietnam

This article develops a dynamic model to account for the enhanced incentive effects that result from market reform through a move toward private property rights and competitive markets. Reform is captured through an emerging profits function which depends on effective prices and incentives to work harder. Static and dynamic output gains from reform are derived through increases in total factor productivity and induced capital accumulation. The model is applied to rice production in Vietnam over the period 1976–94. The more extensive is market reform, the larger the effects found on rice output, the capital stock and transitional growth rates, suggesting that incentives and more competitive markets matter greatly.

Fisheries Instrument Choice under Uncertainty

This paper uses data from an actual fishery to construct a tractable, dynamic model to compare expected profit and its variance, optimal stock size, optimal harvest rate, and optimal fishing effort under different management regimes under uncertainty. The results provide a comparison of instrument choice between a total harvest control and a total effort control under uncertainty, an original method to evaluate the tradeoffs between profits and other criteria in a dynamic context, and insights regarding the relative merits of catch and effort controls in fisheries management. (JEL Q22, D81)

A structural and stochastic optimal model for projections of LNG imports and exports in Asia-Pacific

The Asia-Pacific region, the largest and fastest growing liquefied natural gas (LNG) market in the world, has been undergoing radical changes over the past few years. These changes include considerable additional supplies from North America and Australia, and a recent LNG price slump resulting from an oil-linked pricing mechanism and demand uncertainties. This paper develops an Asia-Pacific Gas Model (APGM), based on a structural, stochastic and optimising framework, providing a valuable tool for the projection of LNG trade in the Asia-Pacific region. With existing social-economic conditions, the model projects that Asia-Pacific LNG imports are expected to increase by 49.1 percent in 2020 and 95.7 percent in 2030, compared to 2013. Total LNG trade value is estimated to increase to US

The Effects of Climate Change on GDP by Country and the Global Economic Gains From Complying With the Paris Climate Accord

127.2 billion in 2020 and US

Economic Analysis of the Effects of Eastern Australia's LNG Exports in Asia-Pacific on Domestic Gas Users

199.0 billion in 2030. Future LNG trade expansion is mainly driven by emerging and large importers (i.e., China and India), and serviced, most importantly, by new supplies from Australia and the USA. The models projected results are sensitive to changes in expected oil prices, pricing mechanisms, economic growth and energy policies, as well as unexpected geopolitical-economic events.

Projections for Eastern Australia's LNG Export Revenues: Opportunities and Risks in the Asia-Pacific Region

Computable general equilibrium (CGE) models are a standard tool for policy analysis and forecasts of economic growth. Unfortunately, due to computational constraints, many CGE models are dimensionally small, aggregating countries into an often limited set of regions or using assumptions such as static price-level expectations, where next period’s price is conditional only on current or past prices. This is a concern for climate change modeling, since the effects of global warming by country, in a fully disaggregated and global trade model, are needed, and the known future effects of global warming should be included in forward-looking forecasts for prices and profitability. This work extends a large dimensional intertemporal CGE trade model to account for the various effects of global warming (e.g., loss in agricultural productivity, sea level rise, and health effects) on Gross Domestic Product (GDP) growth and levels for 139 countries, by decade and over the long term, where producers look forward and adjust price expectations and capital stocks to account for future climate effects. The potential economic gains from complying with the Paris Accord are also estimated, showing that even with a limited set of possible damages from global warming, these gains are substantial. For example, with the comparative case of Representative Concentration Pathway 8.5 (4∘C), the global gains from complying with the 2∘C target (Representative Concentration Pathway 4.5) are approximately US