A Production Function Analysis of Fisheries and Habitat: Open Access versus Optimal Management

We apply a bioeconomic production function approach to fisheries and habitats, to assess consequences of exogenous habitat loss, for both open access and optimal management. We find that habitat levels matter under optimal management, as they directly impact upon profits, and habitat degradation impacts upon profits disproportionally more at low habitat levels. Using time-series data from Icelandic redfish fisheries and assumptions of cold water coral decline, we estimate parameters for the model and indicate potential losses for open access and optimal management. The results support the theoretical predictions, underlining the importance of taking into account habitat-fisheries interactions.