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Measuring the value of ecosystem-based fishery management using financial portfolio theory

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  • Carmona, Itsaso
  • Ansuategi, Alberto
  • Chamorro, José Manuel
  • Escapa, Marta
  • Gallastegui, María Carmen
  • Murillas, Arantza
  • Prellezo, Raúl

Abstract

We highlight the potential benefits of adopting Ecosystem-based Fishery Management (EBFM). We compare the EBFM implementation with the more traditional single-stock approach. We show the contribution of the portfolio theory to the EBFM, which can be achieved by selecting an optimal portfolio to maximise the average revenues and minimise the variance. We use this approach to construct two frontiers: the ecosystem efficient frontier, which considers stock interactions (the variance-covariance matrix), and the stock efficient frontier, only considering individual stock variances.

Suggested Citation

  • Carmona, Itsaso & Ansuategi, Alberto & Chamorro, José Manuel & Escapa, Marta & Gallastegui, María Carmen & Murillas, Arantza & Prellezo, Raúl, 2020. "Measuring the value of ecosystem-based fishery management using financial portfolio theory," Ecological Economics, Elsevier, vol. 169(C).
    • Handle: RePEc:eee:ecolec:v:169:y:2020:i:c:s0921800919301429
    DOI: 10.1016/j.ecolecon.2019.106431
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    References listed on IDEAS

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    1. Le Floc’h, Pascal & Murillas, Arantza & Aranda, Martin & Daurès, Fabienne & Fitzpatrick, Mike & Guyader, Olivier & Hatcher, Aaron & Macher, Claire & Marchal, Paul, 2015. "The regional management of fisheries in European Western Waters," Marine Policy, Elsevier, vol. 51(C), pages 375-384.
    2. Curtin, Richard & Prellezo, Raúl, 2010. "Understanding marine ecosystem based management: A literature review," Marine Policy, Elsevier, vol. 34(5), pages 821-830, September.
    3. H. Scott Gordon, 1954. "The Economic Theory of a Common-Property Resource: The Fishery," Palgrave Macmillan Books, in: Chennat Gopalakrishnan (ed.), Classic Papers in Natural Resource Economics, chapter 9, pages 178-203, Palgrave Macmillan.
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    6. Sanchirico, James N. & Smith, Martin D. & Lipton, Douglas W., 2008. "An empirical approach to ecosystem-based fishery management," Ecological Economics, Elsevier, vol. 64(3), pages 586-596, January.
    7. Knoke, Thomas & Paul, Carola & Härtl, Fabian & Castro, Luz Maria & Calvas, Baltazar & Hildebrandt, Patrick, 2015. "Optimizing agricultural land-use portfolios with scarce data—A non-stochastic model," Ecological Economics, Elsevier, vol. 120(C), pages 250-259.
    8. Anthony Scott, 1955. "The Fishery: The Objectives of Sole Ownership," Journal of Political Economy, University of Chicago Press, vol. 63(2), pages 116-116.
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    10. H. Scott Gordon, 1954. "The Economic Theory of a Common-Property Resource: The Fishery," Journal of Political Economy, University of Chicago Press, vol. 62(2), pages 124-124.
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    Cited by:

    1. Oleg S. Sukharev, 2020. "Portfolio Theory in Solving the Problem Structural Choice," JRFM, MDPI, vol. 13(9), pages 1-21, September.

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