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choice of remuneration regime in fisheries: the case of Hawaii’s longline fisheries

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  • Nguyen, Quang

Abstract

One of the most prominent features of remuneration in the Hawaii’s longline fisheries industry has been the norm of share contract regimes. This paper investigates whether the use of share contract regime is positively correlated to increased economic returns. The principal-agent framework is applied to develop a theoretical model for the remuneration choice. Empirical estimation is conducted using a switching regression model that accounts for certain vessel characteristics effects on revenue, depending on remuneration regime used (i.e., share contract or flat wage), as well as the potential selection bias in the vessels’ contractual choice. Key findings from counterfactual simulations indicate: (1) a negative selection into choosing share contracts, and (2) that flat wage vessels would experience significantly higher revenues if they switch to share contracts. Thus, even though the labor market in Hawaii’s longline fisheries relies upon foreign crew members, the results suggest that it would benefit owners of flat wage vessels to apply share contracts to increase their revenues.

Suggested Citation

  • Nguyen, Quang, 2009. "choice of remuneration regime in fisheries: the case of Hawaii’s longline fisheries," MPRA Paper 13792, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:13792
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    File URL: https://mpra.ub.uni-muenchen.de/13792/1/MPRA_paper_13792.pdf
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    References listed on IDEAS

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    1. Michael Lokshin & Zurab Sajaia, 2004. "Maximum likelihood estimation of endogenous switching regression models," Stata Journal, StataCorp LP, vol. 4(3), pages 282-289, September.
    2. Matthiasson, Thorolfur, 1999. "Cost sharing and catch sharing," Journal of Development Economics, Elsevier, vol. 58(1), pages 25-44, February.
    3. Nigel Key & William McBride, 2003. "Production Contracts and Productivity in the U.S. Hog Sector," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(1), pages 121-133.
    4. McConnell, Kenneth E. & Price, Michael, 2006. "The lay system in commercial fisheries: Origin and implications," Journal of Environmental Economics and Management, Elsevier, vol. 51(3), pages 295-307, May.
    5. FitzRoy, Felix R & Kraft, Kornelius, 1986. "Profitability and Profit-Sharing," Journal of Industrial Economics, Wiley Blackwell, vol. 35(2), pages 113-130, December.
    6. Thorolfur Matthiasson, 1997. "Fixed wage or share: Contingent contract renewal and skipper motivation," Labor and Demography 9702002, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Gary Charness & David Masclet & Marie Claire Villeval, 2014. "The Dark Side of Competition for Status," Management Science, INFORMS, vol. 60(1), pages 38-55, January.
    2. César Salazar Espinoza, 2015. "Share Contract Choices and Economic Performance: Empirical Evidence from the Artisanal Fisheries Sector in Chile," Marine Resource Economics, University of Chicago Press, vol. 30(1), pages 71-95.
    3. Jensen, Frank & Nøstbakken, Linda, 2016. "A corporate-crime perspective on fisheries: liability rules and non-compliance," Environment and Development Economics, Cambridge University Press, vol. 21(3), pages 371-392, June.
    4. Gary Charness & David Masclet & Marie Claire Villeval, 2014. "The Dark Side of Competition for Status (preprint)," Working Papers halshs-01090241, HAL.
    5. Leif Sörensen & Jan Schlüter, 2021. "How do contract types and incentives influence driver behavior?−An analysis of the Kigali bus network," Palgrave Communications, Palgrave Macmillan, vol. 8(1), pages 1-11, December.

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    More about this item

    Keywords

    Remuneration Regime; Longline Fisheries; Hawaii; Commercial Fisheries; Lay System; Crew Shares; Labor Contracts; Incentive Systems;
    All these keywords.

    JEL classification:

    • B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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    1. Socio-economics of Fisheries and Aquaculture

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