Doctor of Philosophy (Ph.D.)
Virginia Institute of Marine Science
James E. Kirkley
Many production activities typically produce undesirable outputs, e.g., the production of the pollutant sulfur dioxide in the generation of electricity. Traditional economic metrics may overstate the efficiency and productivity of these production activities by failing to account for the undesirable outputs. These omissions can lead to conclusions that are biased against resource conservation and protection. Many fisheries capture their target species concomitantly with undesirable outputs such as bycatch of juvenile fish, marine mammals, sea birds, and sea turtles. One such fishery is the California-Oregon (CA/OR) drift gillnet fishery (DGNF), which incidentally takes protected species, such as sea turtles and marine mammals while harvesting swordfish and thresher shark. Beginning in August of 2001, regulatory measures to reduce the take of endangered species (e.g., leatherback sea turtles) have required the annual closure of an area located between Point Conception and 45?? N. latitude, for the time period August 15 to November 15. This regulatory closure acts as a natural experiment for assessing the impact of the time-area closure on the productivity of the CA/OR DGNF. The three primary purposes of this research were to measure the impact of the 2001 time-area closure on the productivity of the CA/OR DGNF, and to estimate the opportunity cost or shadow price of undesirable outputs. These shadow prices provide lower bound estimates of the social costs of conservation regulations intended to protect endangered leatherback sea turtles and other bycatch species. An alternative method which models the joint production of both desirable and undesirable outputs, the directional output distance function approach, was used to estimate the efficiency and productivity of drift gillnet fishing trips, thus crediting trips with reductions in undesirable harvest and increases in desirable outputs for the time period 1996-2008. By incorporating undesirable harvest into the production process, a more appropriate measure of total factor productivity was calculated than what is provided by traditional productivity measures. The new productivity measure can be used to develop more effective policies designed to maintain or improve a fishery's economic performance. The results indicate that efficiency and productivity measures which ignore undesirable outputs substantially misinterpret the economic performance of economic trips. The model that incorporates undesirable outputs indicates that productivity per trip has been growing by 788 pounds of swordfish over the research period relative to the base year. This is considerably lower than the average growth of 964 pounds when undesirable outputs are ignored and 878 pounds when undesirable outputs are allowed to expand. However, post-closure averages suggest that conventional estimates understate the economic performance of the observed trips. Post-closure productivity growth resulted in an increase of 334 pounds of swordfish harvest when adjusted for undesirable outputs. Average trip shadow prices (per animal captured) revealed a conservation opportunity cost for the reduction of undesirable outputs of &2,500 for marketable discards, &6,600 for unmarketable discards, &28,800 for sea turtles, and &9,800 for marine mammals in forgone composite swordfish and thresher shark revenue.
© The Author
Scott, Tara L., "Accounting for undesirable outputs in productivity measurements: Application to the California-Oregon drift gillnet fishery" (2010). Dissertations, Theses, and Masters Projects. William & Mary. Paper 1539616845.