1. The Fishery Resource: Biological and Economic Models
Monday, April 18

2. POPULATION GROWTH (change in stock size)
The Biological Model
Note: This is a static model in the sense that only one stock size can exist at a time.
POPULATION GROWTH (change in stock size) G S S
FISH STOCK or POPULATION

3. To maintain a particular population, catch rate (C) cannot exceed growth rate (G).
GROWTH or CATCH RATE S C S
STOCK or POPULATION

4. Maximum Sustainable Yield – the largest catch rate that can be sustained without reducing fish stock.
Sss
Steady-state population – with no human impact
MSY
Smsy
GROWTH or CATCH RATE
STOCK or POPULATION

5. Impact of fishing effort on the fish stock:
FISH STOCK or POPULATION
GROWTH or CATCH RATE
FISH YIELD
FISHING EFFORT
Zero fishing effort means maximum (steady-state) population

6. Relationship between population, effort and catch
Growth/Catch
YE1 e1 C1
Population
Fishing Effort
Catch per unit of effort is proportional to population

7. Relationship between population, effort and catch
Growth/Catch
YE2 e2 C2
YE1 e1 C1
Population
Fishing Effort
Catch per unit of effort is proportional to population

8. Relationship between population, effort and catch
Growth/Catch
YE3 e3
Sustainable yield fct.
YE2 C2
YE1 e1 C3 C1 e2
Population
Fishing Effort
Catch per unit of effort is proportional to population

9. Sustainable Yield Function
MSY
Fish Yield
Fishing Effort (e.g. number of boats)

10. Total Revenue = PRICExYIELD = PxQ
Sustainable Total Revenue Function
Fish Yield x Price TR
Fishing Effort (e.g. number of boats)

11. Total cost = cost per boat x number of boats$ TC TR
Fishing Effort (e.g. number of boats)

12. The Economic Model – what is the economically efficient level of effort?$
Where TR – TC is the greatest. TC TR
Fishing Effort (e.g. number of boats)

13. Review: What does maximum net returns (TR-TC) say about MR and MC?
MC is the slope of the TC curve.
MR is the slope of the TR curve

14. The Economic Model – what is the economically efficient level of effort?$
Point of Tangency – where MC=MB TC Ee TR
Fishing Effort (e.g. number of boats)

15. Static Efficiency MB=MC TR exceeds TC by the largest amount
Resource owner earns rent
Each year is independent
Yield is sustainable
Discount rate=0

16. Equilibrium Population
Growth/Catch $ TC TR e*
Population
Fishing Effort
Equilibrium Population

17. Dynamic Efficiency
If discount rate is greater than zero (e.g. opportunity cost of capital invested in boats and equipment)
Will want to increase effort and catch in current period
Higher catch rate leads to lower population, lower future catch rates
Future equilibrium possible at lower population and lower catch rate

18. Growth $ TC TR
r=0
r>0
Population
Fishing Effort

19. What if discount rate is infinitely large?
Future is totally discounted (there may be no future)
This is the open access situation
No limits to access
Other fishers observe rents being earned and enter the fishery
Catch continues until TR=TC (zero rent)

20. Technological change – lowers cost of fishing effort, increases pressure on fishery, further reduces population $ TC TC TR
Fishing Effort (e.g. number of boats)

21. Growth $ TC TR
Population
Fishing Effort

22. Policies to limit fishing effort
Territorial use rights in fisheries (TURF)
Limited entry
Limited effort
Catch limits – total allowable catch (TAC)
Individual fishing quotas (IFQ)
Individual transferable quotas (ITQ)
Marine Reserves
Demand reduction/price signals