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Fisheries Management with Stock Growth Uncertainty and Costly Capital Adjustment

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  • Singh, Rajesh
  • Weninger, Quinn
  • Doyle, Matthew

Abstract

We develop a dynamic model of a fishery which simultaneously incorporates random stock growth and costly capital adjustment. Numerical techniques are used to solve for the resource-rent-maximizing harvest and capital investment policies. Capital rigidities bring diminishing marginal returns to the current period harvest, and introduce an incentive to smooth the catch over time. With density dependent stock growth, however, catch smoothing increases stock variability resulting in reduced average yields. The optimal management policy balances the catch smoothing benefits against yield loss. We calibrate the model to the Alaskan pacific halibut fishery to demonstrate the main insights.

Suggested Citation

  • Singh, Rajesh & Weninger, Quinn & Doyle, Matthew, 2005. "Fisheries Management with Stock Growth Uncertainty and Costly Capital Adjustment," ISU General Staff Papers 200511010800001254, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:200511010800001254
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