1 Department of Environmental and Business Economics, Faculty of Business and Social Sciences, SDU2 Centre for Fisheries & Aquaculture Management & Economics, Department of Environmental and Business Economics, Faculty of Business and Social Sciences, SDU3 unknown4 Department of Environmental and Business Economics, Faculty of Business and Social Sciences, SDU
The impact of the convexity assumption
Application of primal non-parametric approaches to estimation of fishing capacity provides useful disaggregated information about fishing firm’s capacities utilizations. A potentially serious issue is that the estimated capacity utilization rates can be relatively low. This may call for reductions in the fishing fleet that are political impossible to defend. In this paper two modifications of the traditional approach are explored. First, non-convex technologies are introduced and it is shown how the primal non-parametric approach leads to different capacity utilization rates. Then capacity utilization measures using cost functions are specified for both convex and non-convex technologies. It is illustrated how the convexity assumption impacts capacity utilization rates and how this dual approach differs from the primal approach. Second, the effect of utilizing these different convex versus non-convex capacity utilization rates in the short-run Johansen industry production model is explored in terms of the resulting policy conclusions. This model has been used to formulate realistic plans to implement fishery policies (decommissioning schemes, zone and time restrictions, etc). Empirically, we illustrate these capacity measures on the Pacific albacore tuna fishery to document the impact of convexity.
Proceedings of the National Marine Fisheries Service Productivity Workshop (santa Cruz, Ca June 11-12, 2012), 2013, p. 124-141
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Noaa Technical Memorandum Nmfs
National Oceanic and Atmospheric Administration (NOAA)