A synthetic approach to forecasting fleet costs and earnings in the northeast regions of the United States

Philippe D Lallemand, University of Rhode Island

Abstract

This study describes the New England Otter Trawl Fishery between 1982 and 1998 and the potential economic impacts of regulations on the Northeastern Multispecies Groundfish Fishery (MGF). ^ The study uses primary data collected by the author and secondary data obtained from the National Marine Fisheries Service (NMFS). This research required extensive econometric analysis of both value landed and cost data. The landed value is influenced by the vessel's physical characteristics, port of landing, seasonal choices of fishing gear-species combinations, days at sea and distance from shore, and the captain's skill (also referred to as the “skipper effect”). The vessel-cost model is composed of several equations, each corresponding to one of the following annual cost items: Trip Expenses - Other Variable Costs - Indivisible Operating Costs - 5 year Overhaul - Depreciation and Interests - Crew Benefits and Crew Bonuses. The estimated equations are used to synthesize an economic model of vessel behavior, which can be used to examine the economic consequences of alternative scenarios. ^ This model was used to examine the impacts of selected regulations on the fishing industry. The results indicate differential impacts, which affect larger vessels (especially above 90 feet). The statistics show that some vessels modify their fishing habits by re-targeting their catch to different species and/or by changing how far they are willing to go fishing. These changes affected essentially geographic and seasonal effort distribution for both large and small trawlers. Larger vessels are fishing more inshore than before and for less valuable species thus bringing more pressure on inshore fish stocks. The results also shed light on the relative efficiency of large and small vessels, although they suggest that the issue is ill phrased!—small (50 to 60 ft) vessels appear more efficient than larger vessels when both are operating near shore. However, smaller vessels are not sufficiently seaworthy to compete with larger (>80 ft) vessels in offshore environments. This finding is pertinent to concerns often expressed about the survival of small vessels under an individual transferable quota (ITQ) regime. ^ These results also confirm the findings by Griffith and Dyer (1996) who concluded that recent regulations especially affected communities relying on specialized fishing fleets with larger than average vessels. ^ Finally it was found that the method of data collection which started in 1994 (i.e. the use of the fishers logbook in lieu of the port agents and dealers' data) was inadequate in capturing the value landed because it recorded landings at the docks before being priced by a dealer. As a consequence, the lack of systematic ex-vessel price data after 1993 required matching the logbook information with the already shrinking dealer information to estimate an ex-vessel price by species, month and port. This structural change in the data series confounds the effects of regulatory changes and stock declines. ^

Subject Area

Economics, Agricultural|Economics, Commerce-Business|Agriculture, Fisheries and Aquaculture

Recommended Citation

Philippe D Lallemand, "A synthetic approach to forecasting fleet costs and earnings in the northeast regions of the United States" (2001). Dissertations and Master's Theses (Campus Access). Paper AAI3029786.
http://digitalcommons.uri.edu/dissertations/AAI3029786

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