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The Measurement of Capacity, Utilization, and Economic Performance: An Application to North Pacific Groundfish Fisheries

  • Author(s): Felthoven, Ronald G.
  • et al.
Abstract

The North Pacific groundfish fisheries (NPGF) of the Bering Sea and Aleutian Islands (BSAI) are among the largest and most valuable fisheries in the world. However, relatively little is known about the economic performance of the industry and concerns loom over the presence of excess fishing capacity. Aside from dissipating rents and shortening fishing seasons, excess capacity can pressure for managers to inadvertently keep the total allowable catch above sustainable levels in order to preserve employment.

In an attempt to address these problems Congress passed the American Fisheries Act (AFA) in 1998, which, among other things, represented an attempt to "rationalize" the pollock fishery (the most valuable of the NPGF fisheries). The AFA included regulations that instituted fishing rights, restricted access to certain parties, and allowed the formation of cooperatives that enabled eligible members to trade quota.

Initial reports indicate that there has been a decrease in fishing effort and an increase in season length for the BSAI pollock fishery since passage of the AFA. However, given that the quantity of pollock caught has not diminished and is still being taken in a few months time, it is unclear whether observed capacity reductions are sufficient to ease existing concerns.

In order to further our understanding of the issues discussed above, this dissertation provides estimates of harvesting capacity and utilization in the catcher-processor sector of the BSAI pollock fishery, and analyzes many of the changes brought about by the AFA. Two proposed methods for measuring fishing capacity--stochastic production frontier (SPF) and data envelopment analysis (DEA)--are employed in multi-input, multi-output applications to the catcher-processor fleet. The resulting capacity estimates from the models are then compared and used to characterize the degree of excess capacity in this sector of the pollock fishery, and illustrate the substantial differences in capacity estimates that may arise when the stochastic aspects inherent in harvesting technologies are ignored. And, because DEA and SPF models allow one to analyze technical efficiency in production, the frameworks are also used to compare pre- and post-AFA technical efficiency among individual vessels and the pollock catcher-processor fleet as a whole.

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