August 5 NEFSC Seminar

Costly Avoidance in a Multispecies Catch Share Fishery

By: Andrew Scheld - U. Washington/VIMS

Joint harvest technologies in multispecies fisheries are often characterized by imperfect selectivity, allowing only limited control of catch composition. This type of technology can be modeled by considering outputs weakly disposable, suggesting targeting and avoidance of individual stocks may be costly. In this paper, a simple individual optimization model is considered with a joint production transformation function which relaxes the assumption of free output disposal to analyze decisions under imperfect output selectivity. Costly avoidance, where production of joint outputs is given up to reduce that of the avoided species, is found to result when the marginal reward for landing an avoided stock is negative, a possible consequence of intense regulatory constraint. This model is then applied to New England groundfish, a multispecies fishery recently transitioned to catch share management, to test for costly avoidance. A hierarchical Bayesian estimation procedure is used to uncover marginal rates of product transformation between a constraining stock and the aggregate mix, finding generally positive values heterogeneously distributed throughout the fleet. We reject the null of costless avoidance, indicating joint production fails to satisfy common disposal assumptions and that constraining output controls for certain stocks may have decreased joint output of quota-abundant species. Furthermore, a unique management setting in which a constraining species quota increased 600% mid-season allows us to identify ex-post costs of quota constraint. We estimate that had the low allocation remained, its cost to harvesters would have been US $3 million.