While environmental stressors such as hypoxia (low dissolved oxygen) are perceived as a threat to the productivity of coastal ecosystems, policy makers have little information about the economic consequences for fisheries. Recent work on hypoxia develops a bioeconomic model to harness microdata and quantify the effects of hypoxia on North Carolina's brown shrimp fishery. This work finds that hypoxia is responsible for a 12.9% decrease in NC brown shrimp catches from 1999–2005 in the Neuse River Estuary and Pamlico Sound, assuming that vessels do not react to changes in abundance. The current article extends this work to explore the full economic consequences of hypoxia on the supply and demand for brown shrimp. Demand analysis reveals that the NC shrimp industry is too small to influence prices, which are driven entirely by imports and other domestic U.S. harvest. Thus, demand is flat and there are no measurable benefits to shrimp consumers from reduced hypoxia. On the supply side, we find that the shrimp fleet responds to variation in price, abundance, and weather. Hence, the supply curve has some elasticity. Producer benefits of reduced hypoxia are less than a quarter of the computed gains from assuming no behavioral adjustment.

JEL Classification Code: Q22

World Trade Organization (WTO) members are conducting negotiations to clarify and improve disciplines on fisheries subsidies at the Doha Round. In this article, I investigate how worldwide subsidy reform in the fisheries sector could affect fisheries output and resource stocks in a trading equilibrium. I demonstrate that the effects of a reduction in subsidies on fisheries output will differ, depending on the conditions of the economy and fisheries management in different countries. A possible outcome of a reduction in non-capacity-enhancing subsidies is that fisheries output will rise in countries where catch quotas are not enforced and remain the same in countries where catch quotas are strictly enforced, expanding the total supply of fisheries products in the short run. In the long run, the world fisheries resource stock may be reduced.

JEL Classification Codes: F13, F18, Q22, Q27

We develop a bioeconomic model to analyze a fishery with fixed costs as well as a within-season continuous cost function for the generalized Schaefer production function with increasing marginal returns to effort level. We analyze the consequences of the combined effects of increasing marginal returns and fixed costs. We find that regardless of the magnitude of the fixed costs, cyclical policies are optimal. We also demonstrate that the danger of potential collapse increases with increasing fixed costs. This result is quite counterintuitive, as higher costs are usually considered to have a conservative effect on resources.

JEL Classification Codes: Q20, Q22, Q57

There is potential to increase the economic returns in many fisheries by improving fisheries management. In this article, maximum and estimated current resource rents are analyzed using a standardized methodology for five case studies of fisheries with different management regimes: individual quotas (Norway), individual transferable quotas (Iceland), co-management (Denmark), vessel catch limits (Sweden), and tradable days-at-sea regulation (Faroe Islands). The Danish co-managed fishery had the highest estimated current rent, corresponding to 51% of landing value compared to a maximum rent of 62%. The Danish case was followed by the Icelandic ITQ fishery (estimated current 30%, maximum 66%), Faroese tradable days-at-sea (current 28%, maximum 55%), Swedish vessel catch limits (current 3%, maximum 74%), and Norwegian individual quotas (estimated current −22%, maximum 43%). Fishery characteristics other than management might influence the estimated resource rent, and the results are discussed in relation to biological sustainability. The method used across fisheries and countries for the estimation of the current economic rent, based on standardized opportunity costs of labor and capital, exaggerates the current positive rent for the ITQ fishery and the negative rent for the individual quota fishery.

JEL Classification Codes: Q22, Q27

Individual transferable quotas (ITQs) assign property rights in fisheries by granting individual fishers a tradable share of the total allowable catch (TAC). ITQs were originally proposed to enhance profitability and safety, but may also provide incentives for more conservation-minded fishing practices. Indeed, recent empirical evidence shows a reduction in the likelihood of stock collapse and a threefold increase in catches two decades after ITQ implementation. Yet these spectacular catch increases follow modest 20% reductions in reported catches. We used standard fisheries models to analyze whether these catch trends are consistent with the theory underlying conservation benefits from property rights. We find that it appears unlikely that catch increases are attributable to ITQs alone. Improved catch reporting systems are often enacted concurrent with ITQs and may plausibly explain sustained catch increases. The existence of this alternative explanation warrants caution about claims that property rights are the cause of sustainable catch gains.

JEL Classification Codes: Q22, Q58

This note acknowledges Jens Warming's contributions (1911, 1931) on what has since come to be known as the open access problem in fisheries. Warming, in a static framework, suggested an optimal landing tax before Pigou (1920) and described the sole owner solution later suggested by Scott (1955b). I describe these results using Warming's framework and point to his previously overlooked contribution concerning the dynamic aspect of fisheries.

JEL Classification Code: Q2