IDEAS home Printed from https://ideas.repec.org/a/wly/ajagec/v104y2022i4p1540-1560.html
   My bibliography  Save this article

Profits, prices and productivity in a common pool fishery

Author

Listed:
  • John B. Walden
  • Min‐Yang Lee
  • Christopher J. O'Donnell

Abstract

Profitability change for any firm depends on both price and productivity change. Because most firms have little influence on prices in either output or input markets, oftentimes productivity change is thought to be the most relevant determinant of profitability change. When firms produce a product by harvesting or extracting government‐regulated natural resource stocks, it is important for regulators to understand how their decisions influence firm profitability and its underlying drivers. In this study, we use a recently developed index number decomposition method to identify the drivers of profitability, price, and productivity change for vessels operating in the U.S. northeast scallop fishery. Our main finding is that increases in profitability over the period 1996 to 2015 were primarily due to increases in prices for scallops, combined with favorable biomass change. Fishing vessels were able to get higher prices for their harvest because of an innovative spatial harvest strategy, which resulted in catches of large, premium‐priced scallops. Remarkably, this system resulted in both an increase in vessels harvesting scallops and large increases in profitability.

Suggested Citation

  • John B. Walden & Min‐Yang Lee & Christopher J. O'Donnell, 2022. "Profits, prices and productivity in a common pool fishery," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(4), pages 1540-1560, August.
    • Handle: RePEc:wly:ajagec:v:104:y:2022:i:4:p:1540-1560
    DOI: 10.1111/ajae.12280
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/ajae.12280
    Download Restriction: no
    File URL: https://libkey.io/10.1111/ajae.12280?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Walden, John B. & Kitts, Nolan, 2014. "Measuring fishery profitability: An index number approach," Marine Policy, Elsevier, vol. 43(C), pages 321-326.
    2. Balk,Bert M., 2012. "Price and Quantity Index Numbers," Cambridge Books, Cambridge University Press, number 9781107404960, September.
    3. Nadiri, M Ishaq, 1970. "Some Approaches to the Theory and Measurement of Total Factor Productivity: A Survey," Journal of Economic Literature, American Economic Association, vol. 8(4), pages 1137-1177, December.
    4. Squires, Dale, 1987. "Fishing effort: Its testing, specification, and internal structure in fisheries economics and management," Journal of Environmental Economics and Management, Elsevier, vol. 14(3), pages 268-282, September.
    5. Nils-Arne Ekerhovd & Daniel V. Gordon, 2020. "Profitability, Capacity and Productivity Trends in an Evolving Rights Based Fishery: The Norwegian Purse Seine Fishery," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 77(3), pages 565-591, November.
    6. Grifell-Tatjé,Emili & Lovell,C. A. Knox, 2015. "Productivity Accounting," Cambridge Books, Cambridge University Press, number 9780521709873, September.
    7. C. J. O’Donnell & Saeideh Fallah-Fini & Konstantinos Triantis, 2017. "Measuring and analysing productivity change in a metafrontier framework," Journal of Productivity Analysis, Springer, vol. 47(2), pages 117-128, April.
    8. Fox, Kevin J. & Grafton, R. Quentin & Kirkley, James & Squires, Dale, 2003. "Property rights in a fishery: regulatory change and firm performance," Journal of Environmental Economics and Management, Elsevier, vol. 46(1), pages 156-177, July.
    9. Greg Ardini & Min-Yang Lee, 2018. "Do IFQs in the US Atlantic Sea Scallop Fishery Impact Price and Size?," Marine Resource Economics, University of Chicago Press, vol. 33(3), pages 263-288.
    10. Clay, Patricia M. & Kitts, Andrew & Pinto da Silva, Patricia, 2014. "Measuring the social and economic performance of catch share programs: Definition of metrics and application to the U.S. Northeast Region groundfish fishery," Marine Policy, Elsevier, vol. 44(C), pages 27-36.
    11. Jin, Di & Thunberg, Eric & Kite-Powell, Hauke & Blake, Kevin, 2002. "Total Factor Productivity Change in the New England Groundfish Fishery: 1964-1993," Journal of Environmental Economics and Management, Elsevier, vol. 44(3), pages 540-556, November.
    12. Dale Squires, 1992. "Productivity Measurement in Common Property Resource Industries: An Application to the Pacific Coast Trawl Fishery," RAND Journal of Economics, The RAND Corporation, vol. 23(2), pages 221-236, Summer.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Solis, Daniel & Agar, Juan & del Corral, Julio, 2015. "The impact of IFQs on the productivity of the US Gulf of Mexico Red Snapper Fishery," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 196639, Southern Agricultural Economics Association.
    2. Walden, John & Fissel, Ben & Squires, Dale & Vestergaard, Niels, 2015. "Productivity change in commercial fisheries: An introduction to the special issue," Marine Policy, Elsevier, vol. 62(C), pages 289-293.
    3. Solís, Daniel & Agar, Juan J. & del Corral, Julio, 2015. "IFQs and total factor productivity changes: The case of the Gulf of Mexico red snapper fishery," Marine Policy, Elsevier, vol. 62(C), pages 347-357.
    4. Färe, Rolf & Grosskopf, Shawna & Walden, John, 2015. "Productivity change and fleet restructuring after transition to individual transferable quota management," Marine Policy, Elsevier, vol. 62(C), pages 318-325.
    5. Håkan Eggert & Ragnar Tveterås, 2013. "Productivity development in Icelandic, Norwegian and Swedish fisheries," Applied Economics, Taylor & Francis Journals, vol. 45(6), pages 709-720, February.
    6. Kvamsdal, Sturla F., 2012. "Technological Change in Renewable Resource Industries: An Alternative Estimation Approach," Discussion Papers 2012/14, Norwegian School of Economics, Department of Business and Management Science.
    7. Sturla Furunes Kvamsdal, 2019. "Indexing of Technical Change in Aggregated Data," Computational Economics, Springer;Society for Computational Economics, vol. 53(3), pages 901-920, March.
    8. Walden, John B. & Kitts, Nolan, 2014. "Measuring fishery profitability: An index number approach," Marine Policy, Elsevier, vol. 43(C), pages 321-326.
    9. Hannesson, Rognvaldur, 2007. "Growth accounting in a fishery," Journal of Environmental Economics and Management, Elsevier, vol. 53(3), pages 364-376, May.
    10. Torres, Marcelo de O. & Felthoven, Ronald G., 2014. "Productivity growth and product choice in catch share fisheries: The case of Alaska pollock," Marine Policy, Elsevier, vol. 50(PA), pages 280-289.
    11. Catherine J. Morrison Paul & Ronald G. Felthoven & Marcelo de O. Torres, 2010. "Productive performance in fisheries: modeling, measurement, and management," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(3), pages 343-360, July.
    12. Mamula, Aaron & Collier, Trevor, 2015. "Multifactor productivity, environmental change, and regulatory impacts in the U.S. West Coast groundfish trawl fishery, 1994–2013," Marine Policy, Elsevier, vol. 62(C), pages 326-336.
    13. Clay, Patricia M. & Kitts, Andrew & Pinto da Silva, Patricia, 2014. "Measuring the social and economic performance of catch share programs: Definition of metrics and application to the U.S. Northeast Region groundfish fishery," Marine Policy, Elsevier, vol. 44(C), pages 27-36.
    14. Álvarez, Antonio & Pérez, Levi & Schmidt, Peter, 2003. "The Relative Importance of Luck and Technical Efficiency in a Fishery," Efficiency Series Papers 2003/03, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    15. Gabriel Natividad, 2016. "Quotas, Productivity, and Prices: The Case of Anchovy Fishing," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 25(1), pages 220-257, March.
    16. Kjell Salvanes & Dale Squires, 1995. "Transferable quotas, enforcement costs and typical firms: An empirical application to the Norwegian trawler fleet," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 6(1), pages 1-21, July.
    17. Fissel, Benjamin E. & Felthoven, Ronald G. & Kasperski, Stephen & O’Donnell, Christopher, 2015. "Decomposing productivity and efficiency changes in the Alaska head and gut factory trawl fleet," Marine Policy, Elsevier, vol. 62(C), pages 337-346.
    18. O'Donnell, C.J., 2014. "Technologies, Markets and Behaviour: Some Implications for Estimating Efficiency and Productivity Change," 2014 Conference (58th), February 4-7, 2014, Port Macquarie, Australia 165867, Australian Agricultural and Resource Economics Society.
    19. Diewert, Erwin & Fox, Kevin J., 2019. "Productivity Indexes and National Statistics: Theory, Methods and Challenges," Microeconomics.ca working papers erwin_diewert-2019-8, Vancouver School of Economics, revised 25 Apr 2019.
    20. Thunberg, Eric & Walden, John & Agar, Juan & Felthoven, Ron & Harley, Abigail & Kasperski, Stephen & Lee, Jean & Lee, Todd & Mamula, Aaron & Stephen, Jessica & Strelcheck, Andy, 2015. "Measuring changes in multi-factor productivity in U.S. catch share fisheries," Marine Policy, Elsevier, vol. 62(C), pages 294-301.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:ajagec:v:104:y:2022:i:4:p:1540-1560. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1111/(ISSN)1467-8276 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.