Source: TEXAS A&M UNIVERSITY submitted to
ECONOMICS ANALYSIS OF THE FISH INDUSTRY
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
TERMINATED
Funding Source
Reporting Frequency
Annual
Accession No.
0167649
Grant No.
(N/A)
Project No.
TEX08385
Proposal No.
(N/A)
Multistate No.
(N/A)
Program Code
(N/A)
Project Start Date
Mar 1, 2006
Project End Date
Feb 28, 2011
Grant Year
(N/A)
Project Director
Griffin, W. L.
Recipient Organization
TEXAS A&M UNIVERSITY
750 AGRONOMY RD STE 2701
COLLEGE STATION,TX 77843-0001
Performing Department
AGRICULTURAL ECONOMICS
Non Technical Summary
Open access of most fisheries in the Gulf contributes to the declining stocks and bycatch problems. This study is to initiate and perform economic evaluations relative to production activities involving fish species, which are important to Texas with respect to wild stock utilization. The information generated by this research will be especially useful to fishery managers (GMFMC and fishery administrators with the NMFS) of the red snapper, the vermilion snapper and the shrimp fisheries.
Animal Health Component
80%
Research Effort Categories
Basic
10%
Applied
80%
Developmental
10%
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
60508103010100%
Knowledge Area
605 - Natural Resource and Environmental Economics;

Subject Of Investigation
0810 - Finfish;

Field Of Science
3010 - Economics;
Goals / Objectives
The general purpose of this study is to initiate and perform economic evaluations relative to production activities involving selected major fish and shellfish species, which are important to Texas. Specific objectives are as follows: -to determine how buyback programs can be used to reduce the capacity of the Gulf of Mexico's shrimp fleet; -to use bioeconomic simulation analysis to evaluate the economic impact and red snapper bycatch reduction achieved by management alternatives that affect the directed and non-directed fisheries in the Gulf of Mexico; and -to improve upon existing bioeconomic analyses of the proposed red snapper rebuilding plan by including the possible use of transferable rights in the red snapper recreational and commercial fisheries.
Project Methods
Objective 1: Texas has a buyback program as part of a limited entry plan that was created by the Texas Legislature in 1995. Two license types are included in the license management program: the commercial bay shrimp license, which is used to harvest food shrimp, and a commercial bait shrimp license, which is used to harvest bait for the recreational fishery in the bays of Texas. An econometric model of the bid function of shrimp fishermen in the Texas inshore fishery will be developed using data from successive rounds of the buyback program and license registration files. The econometrically estimated functions will be used to specify bid functions for shrimp fleets throughout the Gulf, and these will be incorporated into the General Bioeconomic Fisheries Simulation Model (GBFSM). For comparison purposes, a one-time program will be specified in which all capacity reduction is achieved in a single period. Using the GBFSM, policy analysis will be conducted. Objective 2: For both the directed and non-directed fisheries, the first task in the project will be to review literature from the SouthEast Data Assessment and Review (SEDAR) process to determine relevant ranges of various management alternatives to include in the analysis. Shrimp imports data will be examined to see if it is continuing to increase at the same rate as the last six years. Based on visual examination of these trends we will select an upper and lower bound on shrimp prices to use in the simulation analysis. The GBFSM will then be used to analyze a full suite of management alternatives for the directed and non-directed fisheries. The simulation results will then be analyzed to evaluate and rank the various management alternatives in terms of their economic costs and their effectiveness in leading to the recovery of the red snapper stock. Objective 3: A transferable rights programs for the commercial, for-hire recreational, and private recreational sectors of the red snapper fishery will be develop as a submodel to the GBFSM. The transferable rights program in the GBFSM will be used to compare the economic and biological impacts of this program with the policies proposed in the Red Snapper Rebuilding Plan. The first task in the development of a simulation model of a TRs program for the Gulf will be to develop a conceptual foundation for a TRs system in a recreational context. Anderson's (1993) model of angler behavior will provide the foundation for this model. A mathematical model of angler's demand for TRs will be formulated, which can then be incorporated into the GBFSM. Guidance as to how such markets might actually work can be obtained from recent contributions by Sharp (1998) and Kerkvliet and Nowell (2000). With the fully developed TRs model, the economic and biological impacts of policies can be explored. The TRs policies will be compared with the suite of policies that are proposed in the Red Snapper Rebuilding Plan and an assessment of the potential benefit or cost of moving to a TRs program will be developed.

Progress 03/01/06 to 02/28/11

Outputs
OUTPUTS: Modeling of the Gulf of Mexico fisheries continued during the year to complete and validate a user-friendly management tool. Results were reported in journal articles and directly to the scientific staff of the Gulf of Mexico Fisheries Management Council. The modeling tool is being delivered to the Council and the National Marine Fisheries Service for their use in evaluation of future management and policy decisions. PI Retired. PARTICIPANTS: The research presented here was partially funded by MARFIN grant number NA06NMF4330053. Dr. Richard T. Woodward was co-principal investigator on this project. TARGET AUDIENCES: The major target was the Gulf of Mexico Fishery Management Council and the National Marine Fisheries Service who are responsibly for the manage of fisheries in federal waters and state agencies responsibly for management of fisheries in states waters. The target included recreational and commercial fishing organizations as well as individual fishermen. PROJECT MODIFICATIONS: Not relevant to this project.

Impacts
A wide range of red snapper recreational management strategies for their impacts on yield, economic surplus and the fish stock. Simulating a wide range of policies, data envelopment analysis (DEA) was used to find an inspired policy efficiency frontiers that find those management strategies that offer the greatest level of economic surplus for any biological target, looking at both the east and west Gulf fisheries. Red snapper has been declared over fished since 1988 and the 2005 SEDAR 7 stock assessment declared red snapper were over fished and undergoing overfishing. In November 2009 the update of the assessment declared that overfishing was no longer occurring but that the red snapper stocks need to be rebuilt. In this analysis red snapper were found to be overfished or undergoing overfishing. The main difference is in our model and SEDAR 7 model is that we use a higher mortality rate for juveniles and a density dependent model. We also suggest that the east and west should be managed as separate units.

Publications

  • Griffin, Wade L. and Richard T. Woodward. 2011. Determining Policy-Efficient Management Strategies in Fisheries Using Data Envelopment Analysis (DEA), Marine Policy. doi:10.1016/j.physletb.2003.10.071.


Progress 01/01/09 to 12/31/09

Outputs
OUTPUTS: Implications of typical policies on the red snapper rebuilding plan and the use of transferable rights for the red snapper recreational and commercial fisheries was concluded. This resulted in a final report to NOAA/NMFS entitled, "Bioeconomic Analysis of the Red Snapper Rebuilding Plan and Transferable Rights Policies in the Gulf of Mexico," (Grant Number NA17FF2873, August 5, 2009). This was part of one Ph.D. theses Texas A&M. PARTICIPANTS: Not relevant to this project. TARGET AUDIENCES: Not relevant to this project. PROJECT MODIFICATIONS: Not relevant to this project.

Impacts
The project "Bioeconomic Analysis of the Red Snapper Rebuilding Plan and Transferable Rights Policies in the Gulf of Mexico" was completed. SouthEast Data Assessment and Review (SEDAR), National Marine Fisheries Service (NMFS) and the Gulf of Mexico Fisheries Management Council (GMFMC) have been saying for more then 20 years that the red snapper is overfished and undergoing overfishing. They have proposed that shrimpers must cut their bycatch of red snapper juveniles by 74% and they have reduced the TAC for red snapper in the Gulf of Mexico from 9.12 million pounds to 5 million pounds. They have also reduced the recreational season from June 1 to September 30. This has had a major negative impact on shrimpers and recreational fishermen in Texas. On August 5, 2009 we released our findings, which included a higher natural mortality rate for juvenile red snapper and a density dependent model, that red snapper was neither overfished nor undergoing overfishing. In August 24-28, 2009 the SEDAR red snapper stock assessment update workshop came up with the same results; overfished and undergoing overfishing. In an October, 2009 at GMFMC meeting Russell Nelson, a biologist of the Costal Conservation Association, said during public testimony announced that every one on the Council needs to read Wade Griffin's report which says that red snapper are not overfished and are not undergoing overfishing. In November 2009, the SEDAR and NMFS, increased the natural mortality rate of juvenile red snapper, and announced that red snapper was not undergoing overfishing and in February 2010 GMFMC are recommending the TAC be raised to 6.91 million pounds. This single change will increase economic surplus to the Gulf of Mexico by almost $3 million per year or $58 million in present value of economic surplus over the next 23 years. They also reduced the proposed reduction that shrimpers must cut their bycatch of red snapper juveniles to 60%.

Publications

  • No publications reported this period


Progress 01/01/08 to 12/31/08

Outputs
OUTPUTS: Effectiveness of a buyback program for permits to fish in the Federal waters of the Gulf of Mexico was concluded. This resulted in a final report to NOAA/NMFS entitled, "The Cost and Effectiveness of Sequential License Buyback Programs in the Gulf of Mexico," (Grant Number NA04NMF4330080, July 29, 2008). This will be part of two Ph.D. theses, one at Texas A&M and the other at the University of Rhode Island. The building and calibrating of the biological simulation model which include shrimp, red snapper, vermilion snapper, and all other reef fish was completed. This is critical step to completing bioeconomic model that will be used to analyze of the red snapper rebuilding plan and transferable rights policies in the Gulf of Mexico. PARTICIPANTS: Nothing significant to report during this reporting period. TARGET AUDIENCES: Reports made available to public policy makers in fisheries management PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
One approach excess capitalization in shrimp fisheries in the Gulf of Mexico is to purchase permits to fish from existing fishermen. This approach is currently being operated by the Texas Parks and Wildlife Department (TPWD). Data from the Texas program suggest that bidders may be intentionally overbidding in earlier rounds in hopes of being paid an amount greater than the true value of their licenses. We hypothesize that the sequential design of the program creates an incentive to overbid in this way, creating what we call a speculative premium in bids. If this premium is great, it could increase the government's cost of achieving a reduction in capacity through a buyback program. The experimental analysis allowed us to test several hypotheses about bidding behavior in sequential auctions that are difficult to test in a real-world setting. We compared three competing designs for an auction: a one-time buyback, a sequential buyback without the option to reject a granted bid, and a sequential auction in which the option to reject a granted bid is allowed as in the TPWD program. The experimental data support the hypothesis that buyback of licenses will take the longest in the non-binding auction. Analysis of the experimental results finds that the highest initial bids are found in the individual binding treatment, the second highest initial bid will occur in the sequential binding treatment, and the lowest initial bid will occur in the sequential non-binding treatment. This finding is interesting because it is not consistent with theoretical predictions that are implicitly assumed in the econometric analysis. Finally, the experimental study found weak evidence that the sequential non-binding auction format leads to lower bids initially, and that those bids will increase over time as individuals attempt to earn greater gains in later auctions. Again, this is not consistent with the sequential nonbinding program run in Texas. In that program, we find that bids have tended to fall over the periods. SEDAR 7 (Southeast Data, Assessment and Review) state that red snapper is overfished and being and overfishing. However, they failed to include density dependency, they calibrated their model to historical data without using the policies that were in place during that historical period, and their natural mortality for age 0 and 1 fish was to high. When correcting for these errors, we find that red snapper is not as overfished as their report claims.

Publications

  • Kim, H.N., Woodward, R.T., and Griffin, W.L. 2009. "Can Transferable Rights Work in Recreational Fisheries" in D.R. Leal and V. Majaraj (eds.). Evolving approaches to managing marine recreational fisheries. Lexignton Books: Lanham, MD.


Progress 01/01/07 to 12/31/07

Outputs
Simulation policy analysis in the Gulf of Mexico fisheries is difficult to manage when several species are included in the same simulation model. A system of Excel and Fortran files were developed to set up the data for General BioEconomic Simulation Model (GBFSM), execute GBFSM, and analyze the simulation output from GBSFM. We refer to this system as a BioEconomic Simulation System - BESS. The trends from the Texas Inshore Shrimp License Buyback Program have been examined as a means for further understanding sequential buyback of the bay and bait licenses. Based on license holder data over the first 7 years of the buyback program, we find an increase in the average length for vessels in the fleet and a noticeable propensity for older license holders to sell out. In examining how individual agents respond to the auction mechanism we find evidence that bidders inflate their bids early on and lower them towards truthful revelation as the auction progresses. We can make a few policy relevant observations on the basis of this analysis. First, we have provided empirical support for the idea that a sequential auction will tend to induce speculation among its participants. This result could have important implications for managers hoping to get the most "bang for their buck" from a buyback scheme. Also, we have shown that systematic differences exist in both auction participation rates and bidding behavior across age classes. For managers concerned with social implications of buyback programs, this result will also be important. For as long as economists have studied environmental and natural resource issues, they have criticized the use of command-and-control approaches to managing resource commons. The main critique is that a policy that holds all participants to a single, inflexible method of control does not allow for heterogeneous parties to find ways to achieve policy goals at lower costs or yielding greater benefits. Traditional approaches to management of recreational fisheries fall into this category and this is certainly true for the red snapper recreational fishery in the Gulf of Mexico (hereafter GOMRS). There is little doubt that the current management approaches being used in the GOMRS fishery are economically inefficient. We have explored the potential for a TR approach as an alternative to seasonal closures. We believe that a TR approach is institutionally feasible, though it will be difficult, especially due to the challenges associated with monitoring and enforcement. We then simulate the consequences of such an approach. Using our recreation demand model, we simulate the implementation of a TR program and find that there is potential for welfare increases in the recreational sector. Based on our very preliminary model, we find that the introduction of a TR program will lead to an increase in aggregate recreational surplus. However, the surplus to fishermen using private and head boats decline over time, while that of the charter fishermen increases. If this result holds for a calibrated model it would indicate that the distributional consequences of a TR program should not be ignored if this approach were actually implemented.

Impacts
The information generated by this research will be especially useful to fishery managers of the GMFMC, fishery administrators with the NMFS, and the Texas Parks and Wildlife Department of the red snapper and the shrimp fisheries.

Publications

  • Kim, Hwa Nyeon, Richard T. Woodward and W. Douglass Shaw (2007) "Distributional Consequences of Fees in a Discrete Choice Model of Recreation Demand with Incomplete Data: An Application to Mode-Specific Fishing," Land Economics, 83(4): 539-560.
  • Riechers, Robin, Wade Griffin, and Richard Woodward. 2007. "The Texas Inshore Bay and Bait License Buyback Program." Fisheries Buybacks. Rita Curtis and Dale Squires (Editors). Blackwell Publishing 2121 State, Ames, Iowa 50014 USA.


Progress 01/01/06 to 12/31/06

Outputs
Transferable rights (TR) systems were investigated to determine how it could be designed for the use in a recreational fishery such as the Gulf red snapper fishery. Despite the increasing number of restrictions imposed on the Gulf's anglers the total estimated recreational harvests still regularly exceeds the TAC allocated to the recreational sector. In order to overcome the recent over fishing situation TR programs are being increasingly considered in the recreational fishery. A conceptual framework was to develop and an empirical model was developed to analyze the possible use of a TR program for the recreational fishery. The existing regulations surrounding recreational fishery management were also reviewed. Some lessons from hunting programs and other applications of TRs were evaluated to find out preferable institutional schemes for the recreational TR program. A summary of the issues at stake and present the advantages and disadvantages of alternative solutions were summarized. Analytical models of different units of measurement of TRs such as fish, day, and pounds were developed and comparative statics of decision variables which affect the utility was carried out with respect to the permit price. It could not confirm which unit of measurement would maximize a representative angler's utility the most. To estimate an empirically based recreation demand that incorporates TR permit demand, four model specifications were used to find a better model to estimate the recreational trip demand. Daily access fee-based policies were examined as an approximate price instrument of TR program. We find that a fee can be very effective in reducing recreational fishing demand in the Gulf of Mexico. A price instrument such as a fee and TRs to rationing would lead to distributional consequences across modes. Results indicate that a user fee would have much greater impacts on low income groups, than on higher ones and would affect low-cost fishing modes much more than it would modes that are relatively expensive. A conceptual framework of a simulation submodel of the TR program was developed. The assumptions that used to build the individual and aggregate TR demand were carefully described. A conceptual foundation was developed to explain how the market clearing price of the TR is determined and how the TR program works to allocate permits not only within one sector but also between recreational and commercial sectors. Although anglers would need to pay additionally to purchase the TR permits, an efficiency gain moving from the current closures to the TR program would be substantial.

Impacts
The information generated by this research will be especially useful to fishery managers of the GMFMC, fishery administrators with the NMFS, and the Texas Parks and Wildlife Department of the red snapper and the shrimp fisheries

Publications

  • Riechers, Robin, Wade Griffin, and Richard Woodward. "The Texas Inshore Bay and Bait License Buyback Program." Fisheries Buybacks. Rita Curtis and Dale Squires (Editors). Blackwell Publishing 2121 State, Ames, Iowa 50014 USA. 2006.
  • Nance, James, Walter Keithly, Charles Caillouet, John Cole, Wilson Gaidry, Benny Gallaway, wade Griffin, Rick Hart, and Michael Travis. "Estimation of Effort, Maximum Sustainable Yield, and Maximum Economic Yield in the Offshore Shrimp Trawl Fishery of the Gulf of Mexico." Gulf of Mexico Fishery Management Council Ad Hoc Shrimp Effort Working Group. November 2006.


Progress 01/01/05 to 12/31/05

Outputs
Considerable effort was put into remodeling the optimization procedure for calibrating the biological model in general bioeconomic fishery simulation model (GBFSM). The reason for doing this was to make calibrating the model easier and more accurate. After the remodeling was completed the shrimp portion of the simulation model was calibrated. Progress was made for project "Bioeconomics Analysis of the Red Snapper Rebuilding Plan and Transferable Rights Policies in the Gulf of Mexico." The focus has been on estimating a discrete choice recreational trip demand model. We would be to be able to use demand functions from a previous MARFIN project. However, after careful analysis, we concluded that re-estimation was necessary. The re-estimation of recreational model allows us to predict mode-specific demand that will also be the foundation for the submodels to be developed for GBFSM. Primary attention has been to estimate mode-specific demand functions in which the marginal willingness to pay varies with income. Based on the estimated model, we are able to predict a decline in the number of trips to the Gulf if a fee per day of fishing were imposed. On average, the number of trips taken will decrease from 6.28 per 60-day period to 3.495 at $10, 1.369 at $30 and 0.605 at $50. According to our results, the most expensive mode (charter boat) is not likely to be affected by price change but the least expensive mode (shore) will be significantly affected by even smaller price change. Progress was made in the project "Cost and effectiveness of sequential license buy-back programs in the Gulf of Mexico." With the available shrimp license buyback data, the task of formulating the econometric model began. Empirical techniques utilized to estimate models using auction data rely heavily on the specification of an equilibrium bidding function. These bidding functions are derived using the concept of Nash Equilibrium by maximizing the payoff to an arbitrary bidder subject to a sequential rationality constraint. We have found that the assumptions of standard auction theory generally imply truthful revelation. This finding was critical for our understanding of the appropriate model as further inspection of the data made it clear that these assumptions are too rigid to be applied to the shrimp license buyback auction. Because of many extremely high bids in the data, we believe bidders in this particular auction routinely engage in speculation by inflating their bids above their true private value. The assumption of truthful revelation is clearly inconsistent with the data and any empirical approach based on this assumption must be rejected. Hence, we ultimately concluded that empirical models based on traditional auction theory would ignore some of the most interesting features of the shrimp license buyback auction. Although estimation techniques based on modern auction theory were found to be inadequate to explain our data, there is precedent for modeling auction data outside of the traditional auction theory framework.

Impacts
The information generated by this research will be especially useful to fishery managers of the GMFMC, fishery administrators with the NMFS, and the Texas Parks and Wildlife Department of the red snapper and the shrimp fisheries.

Publications

  • Griffin, Wade L. 2005. "Use of Economics in Fisheries: Some Observations." Journal of Agricultural and Applied Economics, Vol. 37. No. 2 (August 2005). pp 299-305.
  • Woodward, Richard T., Yong-Suhk Wui and Wade L. Griffin. 2005. "Living with the Curse of Dimensionality: Closed-Loop optimization in large-scale fisheries simulation model." American Journal of Agricultural Economics 87(Feb. 2005):48-60.


Progress 01/01/04 to 12/31/04

Outputs
Development of a user-friendly interface for use with the General Bioeconomic Fisheries Simulation Model (GBFSM) was begun in 2003. This software modeling tool that combines GBFSM with an interface that allows for easy access to the input data files is called EFESUS, Evaluating Fishery Economic Systems Using Simulation. During this current year, major improvements were made to both GBFSM and EFESUS to allow easier use by research personnel. The major changes that will be obvious to the user are the ability to change parameters without needing to recompile GBFSM, improved access to output, improved format for Effort and Landings Data, and specially designed tuning screens. Progress was in the project "Bioeconomics Analysis of the Red Snapper Rebuilding Plan and Transferable Rights Policies in the Gulf of Mexico". Recreational was assimilated into catch and effort to be used in tuning GBFSM. The shrimp catch and effort data needed to calibrate GBFSM was assimilated. The GBFSM was calibrated for the shrimp fishery in the Gulf of Mexico. We have continued the process of developing analytical models of alternatives for transferable rights programs in the recreational red snapper fishery. The analytical analysis will provide not only important conceptual results, but also the foundation for the submodels to be developed for GBFSM. Using analytical and numerical methods, we have focused on comparing alternative specifications for the transferable right, comparing the characteristics of rights specified in terms of the number fish landed, number of days spent fishing, total weight of fish landed, and angler utility. These models will then provide the foundation for the model of angler behavior that is to be incorporated into GBFSM.

Impacts
The information generated by this research will be especially useful to fishery managers (GMFMC and fishery administrators with the NMFS) of the red snapper, the vermilion snapper and the shrimp fisheries.

Publications

  • No publications reported this period


Progress 01/01/03 to 12/31/03

Outputs
1) To reduce bycatch of red snapper by the shrimp fishery in the Gulf of Mexico, fractional license and fractional gear programs, were evaluated both theoretically and using a simulation model. They are compared with the current regulatory policy requiring shrimp vessels to use bycatch reduction devices to rebuild red snapper stocks. Either of the FL or FG program could reduce effort and the related problem of bycatch resulting in improving red snapper stocks, while at the same time increasing economic welfare in the fishery. 2) Facilitated by remarkable increases in computational speed, simulation models are becoming more and more complex and are being increasingly used in applied economic analysis. However, computational limitations remain a major barrier to the study of dynamically optimal policies. We study the problem of carrying out dynamic optimization in conjunction with large simulation models and propose a method for working around the computational difficulties that arise in such problems. Our methods are applied to a model of the Gulf of Mexico's red snapper fishery to study the dynamically optimal total allowable catch. We show that small DP problems can be used to approximate the value function of large systems, with which approximate dynamically optimal paths can be identified. Our approach overcomes the difficulties of formulation because the objective of the DP problem is clearer and more limited: to generate a value function to be used as an input into the simulation model. The Taylor decision rule curse is overcome because the rule found in the DP model is not used, instead the DP solution feeds into a simulation model that is used in a more or less standard fashion. 3) A first version of a user interface to the general bioeconomic fisheries simulation model (GBFSM) developed by personnel at Texas A&M University in cooperation with the Coastal Fisheries Division of the TPWD. The first version of an interface with general bioeconomic fisheries simulation model (GBFSM) has been finished and is called EFESUS which stands for Evaluating Fisheries Economic Systems Using Simulation

Impacts
1)Our empirical analysis of the shrimp and red snapper fisheries of the Gulf of Mexico, finds that FL or FG policies are preferred to the current BRD policy since these approaches can lead to equivalent benefits to the red snapper fishery, while at the same time providing economic benefits to the shrimp fishery. 2)We show that DP is both feasible and desirable to find the approximate solution of such problems using methods and technology that are available today. Applying these methods would be a step toward improved economic advice and analysis.

Publications

  • Funk, Robert Wade Griffin, James Mjelde, and John Ward. A Simulation Model of License Buyback in the Texas Bay Shrimp Fishery. Submitted to Marine Resource Economics. Marine Resource Economics, Vol. 18, pp. xxx-xxx, 2003.
  • Woodward, Richard T. and Wade L. Griffin. 2001. Size and Bag Limits in Recreational Fisheries: Theoretical and Empirical Analysis. Marine Resource Economics. Vol. 18, pp. 239-262, 2003.
  • Gillig, Dhazn, Teofilo Ozuna Jr. Richard Woodward and Wade Griffin. 2001. Joint Estimation of Revealed and Stated Preferences Data: An Application to Recreational Red Snapper Valuation. Agricultural and Resource Economics Review 32/2 pp. xx-xx, October, 2003.
  • Griffin, Wade. 2003. A General Bioeconomic Fisheries Simulation Model: Description, Calibration, Validation, and Application. Proceedings of the First North American Fisheries Economics Forum, New Orleans, Louisiana, April, 2001. pp. 97-112.


Progress 01/01/02 to 12/31/02

Outputs
A fractional license (FL) program or a fractional gear (FG) program would be an alternative approach that will reduce effort and the related problem of bycatch resulting in improving red snapper stocks and at the same time increase the welfare of shrimp vessels. While bycatch reductions devices (BRDs) tackle the bycatch problem directly by restricting the trawls of shrimp vessels without considering the economic consequences, a FL program or FG program solves the bycatch problem indirectly by reducing the real effort with economic benefits of the increased social welfare in shrimp fishery. One of the main policies used in the Gulf's red snapper fishery is a limit on the total allowable catch (TAC). If the TAC is dynamically optimal, then the restrictions imposed today will be done with the knowledge that policies in the future will react to the evolving conditions over time. The PV maximizing policy leads to a red snapper spawning stock of about 90 million pounds by year 2032 of the simulation, slightly more than doubling the stock in that period. It is possible to achieve higher stock levels, but at some cost in terms of producer and consumer surplus. In a recreational demand study the effect that recreational activities have on the Gulf of Mexico red snapper was measured through recreational demand models, specified as travel cost models. The major findings were: 1) Consumer surplus values obtained in previous studies, e.g. Griffin, Gillig and Ozuna, are underestimated because the authors omitted time variables. 2) For angler using a private/rented boat their consumer surplus is $263.51 per trip and for angler using other mode of fishing $347.17 per trip. 3) In order to reduce the number of fishing trips and rebuild the stock of red snapper, fishery managers should control fishing effort directly, e.g. closures and limit entry.

Impacts
These findings have important policy implications for managing the shrimp and red snapper fisheries in the Gulf of Mexico. The results of the TED analysis implies that better nest protection would be more effective in the long run than the TED regulations in restoring the Kemp's ridley population.

Publications

  • Wui, Yong-Suhk, "An Integrated Economic Analysis of Alternative Bycatch, Commercial, and Recreational Policies for the Recovery of Gulf of Mexico Red Snapper," a Ph.D. Dissertation, May 2002
  • Valencia, Karla Dafne Rosette, "Recreation Demand of Red Snapper with Emphasis on the Significance of Time Variable and Cross-Equation Coefficients," a Ph.D. Dissertation, August 2002


Progress 01/01/01 to 12/31/01

Outputs
The economic status of the Texas shrimp-harvesting sector is analyzed based on cost and revenue data for the period 1987-92. Texas ex-vessel shrimp prices have remained low and stable while shrimp operating costs have been increasing. During the 1987-92 period, shrimp operations in Texas had an annual loss averaging $3,875/vessel. A descriptive analysis of the long-run fishery behavior shows that pounds of shrimp landed, vessel length, fuel price, vessel age, and abundance of shrimp are significant factors that affect the costs of shrimp operations. The bioeconomic impacts of sea turtle conservation policies on the shrimp industry in the Gulf of Mexico are analyzed using a general bioeconomic fisheries simulation model (GBFSM). The GBFSM was extended to include the biological sub-model for the Kemp's ridley (Lepidochelys kempii) sea turtle. The polices examined for the conservation of the Kemp's ridley sea turtle include the use of turtle excluder devices (TEDs) on shrimp trawls and different levels of nest protection. Results show that the Kemp's ridley sea turtle population, in terms of mature female turtles, will rebuild even without the use of TEDs. Althought TEDs may accelerate recovery of the Kemp's ridley turtle population, it does so at a much greater cost. The total welfare costs of using TEDs, in terms of present value producer and consumer surpluses to the Gulf shrimp industry, is $-39.4 million. The value of recreational red snapper fishing in the Gulf of Mexico was estimated. The results indicate that an improvement in expected fishing quality will increase consumer surplus and that most of the increase is contributed by the recreationists who initially do not take recreational red snapper fishing trips, but later take a positive number of trips.

Impacts
These findings have important policy implications for managing the shrimp and red snapper fisheries in the Gulf of Mexico. The results of the TED analysis implies that better nets protection would be more effective in the long run that the TED regulations in restoring the Kemp's ridley population.

Publications

  • Samonte-Tan, Giselle P. B. and Wade L. Griffin, "Bycatch Reduction Impacts on the Shrimp Harvesting and Consumer Sectors in the Gulf of Mexico." Society and Natural Resources, Vol. 14, pp. 223-237, 2001.


Progress 01/01/00 to 12/31/00

Outputs
The economic status of the Texas shrimp-harvesting sector is analyzed based on cost and revenue data for the period 1987-92. Texas ex-vessel shrimp prices have remained low and stable while shrimp operating costs have been increasing. During the 1987-92 period, shrimp operations in Texas had an annual loss averaging $3,875/vessel. A descriptive analysis of the long-run fishery behavior shows that pounds of shrimp landed, vessel length, fuel price, vessel age, and abundance of shrimp are significant factors that affect the cost of shrimp operations. The bioeconomic impacts of sea turtle conservation policies on the shrimp industry in the Gulf of Mexico are analyzed using a general bioeconomic fisheries simulation model (GBFSM). The GBFSM was extended to include the biological sub-model for the Kemp's ridley (Lepidochelys kempii) sea turtle. The policies examined for the conservation of the Kemp's ridley sea turtle include the use of turtle excluder devices (TEDs) on shrimp trawls and different levels of nest protection. Results show that the Kemp's ridley sea turtle population, in terms of mature female turtles, will rebuild even without the use of TEDs. Although TEDs may accelerate recovery of the Kemp's ridley turtle population, it does so at a much greater cost. The total welfare cost of using TEDs, in terms of present value producer and consumer surpluses to the Gulf shrimp industry, is $-39.4 million. The value of recreational red snapper fishing in the Gulf of Mexico was estimated. The results indicate that an improvement in expected fishing quality will increase consumer surplus and that most of the increase is contributed by the recreationists who initially do not take recreational red snapper fishing trips, but later take a positive number of trips.

Impacts
These findings have important policy implications for managing the shrimp and red snapper fisheries in the Gulf of Mexico. The results of the TED analysis implies that better nest protection would be more effective in the long run than the TED regulations in restoring the Kemp's ridley population.

Publications

  • Economic Status and Policies Affecting the Shrimp Industry in the Gulf of Mexico, PhD Dissertation by Lee Tiffany Giselle PB. Samonte-Tan, May 2000.
  • Gillig, Dhazn, Teofilo Ozuna, and Wade L. Griffin, 2000. The Value of the Gulf of Mexico Recreational Red Snapper Fishery. Marine Resource Economics, Vol. 15, pp. 127-130.


Progress 01/01/99 to 12/31/99

Outputs
During the past decades, the Gulf of Mexico red snapper (Lutjanus campechanus) fishery has been subjected to severe overfishing due to direct harvesting of adult red snapper by commercial and recreational red snapper fishermen and the bycatch of juvenile red snapper by shrimpers. To rebuild declining red snapper stocks alternative management policies have been implemented by the Gulf of Mexico Management Council. A simulation model was used that includes the biological and economic interdependencies of red snapper and shrimp fisheries to comprehensively assess the biological and economic effects occurred in each fishery over a 50-year period. Policies examined include: Base (policies in place in 1995 which include TAC = 6.0 million pounds and Bag Limit = 5 fish/trip), 1995 Overage (Base but recreational allowed to exceed their TAC approximately 50%), BRD (Base plus BRD), Increase TAC 9.12 (Base plus increase TAC to 9.12 million pounds), Decrease Bag Limit (Base plus reduce recreational bag limit to 4 fish/trip), and 1998 Current (Policies in place in 1998 which include BRD, Decrease Bag Limit and Increase TAC 9.12). Results indicate that individual policies are not as preferable as the 1998 Current policy. The BRD policy rebuilds the spawning stock rapidly and to a greater level than the other policies; yet, it generates the smallest total net surplus (TNS). The Increased TAC policy generates the largest TNS, but only marginally rebuilds the spawning stock. The TNS under the Decreased Bag Limit policy is slightly higher than that under the Base policy, but the spawning stock by the end of the target year is identical to that under the Base policy. The spawning stock under the 1995 Overage policy is smaller than under the Base policy, even thought its TNS is larger than the Base policy. When these policies are jointly implemented as in the 1998 Current policy, the spawning stock and the TNS are both increased to higher levels and this policy is determined to be the most prefered policy. The improvement in the results under the 1998 Current policy is explained by the fact that while the BRD policy rebuilds the red snapper stock to a higher level, the increased TAC policy allows the commercial and recreational fishermen to harvest a greater share of this increased red snapper stock. The increase in the harvest results in an increase in the total surplus to the recreational red snapper fishery and subsequently an increase in the TNS. In spite of having an overall gain in the TNS, losses to the consumer and producer occur in the shrimp fishery under the 1998 Current policy. Because the recreational red snapper consumer gains exceed the losses in the shrimp fishery, the recreational red snapper consumer could potentially redistribute some gain (compensation) to the shrimp fishery in order to alleviate the loss in the shrimp fishery. The compensation can also potentially be used as funding to support research to improve the BRD. At present, the shrimp loss from the use of the BRD is estimated at 6.5 percent. With the improvement of BRDs, this loss can be reduced and the less the shrimp loss, the smaller the lost in surplus in the shrimp fishery.

Impacts
(N/A)

Publications

  • Griffin, Wade L. and Granvill D. Treece "A guide to the financial analysis of Shrimp Farming 1999" Texas A&M University - Sea Grant Program, TAMU-SG-99-502, June 1999


Progress 01/01/98 to 12/31/98

Outputs
The period before the mid-1980s seemed to be economically viable for shrimp fishing in the Gulf of Mexico. In 1980 U.S. imports began to increase keeping shrimp prices depressed. At the same time, the price of fuel tripled in price and the U.S. shrimpers were excluded from Mexican waters due to the 200-mile extended jurisdiction. During period 1987 to 1992 imports continuing to increase and constituting a major portion of domestic shrimp supply and real ex-vessel prices of shrimp decreasing. Shrimp fishermen were also faced with the adverse effect on shrimp profits from the required use of turtle excluder device that reduced profits through the loss of shrimp catch. Now bycatch reduction devices (BRDs) are required in shrimp trawls, which will put additional hardship on the fishery which will lead to the exit of many shrimp fishing vessels from the fishery. A study was completed that estimated the changes in present value of rent that would result under different survival rates of shrimp loss that are lost due to using a BRD. In addition, to measure the welfare effects induced by a BRD policy, surplus changes in producer and consumer markets were determined. In general, as the survival rate of shrimp lost through the fisheye BRD decreased, Gulf-wide losses to producers and consumers increased significantly. At 100% survival rate, overall producer surplus was at-$11.5 million and consumer surplus was-$2.1 million. At 0% survival rate, losses to producers and consumers increased by 31% (-$15.2 million) and 53% (-$3.2 million), respectively. When producer surplus is added to consumer surplus, the total cost to society for requiring shrimpers to use fisheye BRDs in the federal waters of Alabama through Texas in the Gulf shrimp fishery ranged from $13.6 million to $18.4 million.

Impacts
(N/A)

Publications

  • Griffin, Wade L., Arvind K. Shah, and James M. Nance. 1997. "Estimation of Standardized Effort in the Heterogeneous Gulf of Mexico Shrimp Fleet," Marine Fisheries Review, Vol. 59, No. 3, pp. 23-33.
  • Funk, Robert D., Wade L. Griffin, James W. Mjelde, Teofilo Ozuna, Jr., and John M. Ward. 1998. "A Method of Imputing and Simulating Cost and Returns in Fisheries," Marine Resource Economics, Vol. 13, No. 3.
  • Griffin, Wade L., Dhazn Gillig, and Oral Capps, Jr. 1998. "Shrimp Ex-Vessel Prices Landed from the Gulf of Mexico," Marine Resource Economics, Vol. 13, pp. 89-102.


Progress 01/01/97 to 12/31/97

Outputs
The use of count models for recreational demand was used to show how to mathematically decompose changes in the conditional mean of the Poisson and negative binomial models. Additionally, it was shown how to use the decomposition to decompose elasticities and changes in expected consumer surplus. The various decompositions were applied to the Gulf of Mexico recreational red snapper fishery. The application suggests that more information can be extracted from the estimated coefficients of the Poisson and negative binomial models than is commonly realized. Nominal and standardized effort in the Gulf of Mexico for the years 1965 through 1995 was estimated through the use of a standardization model and then an expansion model. The expansion model estimates nominal days fished for non-interview landing data. The standardization model converts nominal days fished to standard days fished. Our approach yields higher inshore days fished in the later years than does the NMFS due to the reduction in interview landings data in the inshore area. A 3SLS procedure is employed to analyze U.S. Gulf of Mexico shrimp ex-vessel prices by size class and import supplies using monthly time-series data for the period 1981-1995. Results indicate that shrimp ex-vessel prices are inflexible. Own-price flexibilities range from -0.0663 to -0.1027. Primary substitutes for shrimp are cross size shrimp and import supplies from South America. Structural changes and seasonal variations are evident for shrimp ex-vessel prices as well as import supplies. The economic status of the Texas shrimp-harvesting sector was analyzed. Results indicate that the fleet was economically viable up to 1979 but that this viability abruptly ended due to increase in imports which have kep shrimp prices low in the face of rising input costs, especially fuel.

Impacts
(N/A)

Publications

  • GRIFFIN, W.L., WARD, J., NANCE, J. 1997. A Bioeconomic Analysis of Management Alternatives to Control Sea Turtle Mortality in the Gulf of Mexico Shrimp Fishery. Proceedings of the Fisheries Bycatch: Consequences and Management, August 27-28, 1996, Dearborn, MI, Alaska Sea Grant Report 97-02.
  • SADEH, A., GRIFFIN, W.L. 1997. Value of Feedback in Agricultural Decisions. Agricultural Systems, 53:285-301.


Progress 01/01/96 to 12/30/96

Outputs
A Seemingly Unrelated Regression (SUR) procedure was used to analyze inverse ex-vessel demand functions for shrimp from the Gulf of Mexico using monthly time-series data from 1981 to 1995. Five shrimp sizes: less than 21; 21 to 30; 31 to 50; 51 to 67; and greater than 67 head-off tail counts per pound, were analyzed. Results indicate that price variations are influenced by own and cross quantities, cold storage holding quantities, import quantities, structural change, and seasonality. The ex-vessel price for medium sizes, 21-67 ct., seems more sensitive to cross-size landings than to own-landings. Results confirm the existence of seasonal variation in ex-vessel prices for other than medium sizes, expressed through intercept shifters as well as the slope shifts of own-landings. Significance of the respective import coefficients are consistent with expectations that increases in imports will lower ex-vessel price levels. Cold storage holdings affect ex-vessel prices for medium sizes. A forecasting model to obtain cost estimates on a per pound, or per dollar basis, at the vessel level was developed. Information available in the modified NMFS landings files was used to forecast these costs for every fishing trip made by a commercial gulf shrimp fishing vessel. Thus, annual industry level cost estimates, previously unavailable, can now be obtained by summing per trip costs within any year. This method is easily translated to other fisheries that have a history of previous cost surveys.

Impacts
(N/A)

Publications


    Progress 01/01/95 to 12/30/95

    Outputs
    Estimating expanding days fished from interviewed shrimp landings data to total landings data was continued from the previous year. Thirteen expansion models were fitted using actual interview data, including catch per unit of effort and days fished per trip models. One days fished per trips model was selected as the most appropriate expansion model based onthe R-square values and the error sum of squares (on untransformed scale and summed over all years). The effort expansion modeling approach used in this project to estimate nominal effort is similar to the approach currently used by NMFS, except the approach proposed here controls for the bias that may ocur due to unproportionality in the landed and interviewed pounds from vessels and boats. In general, NMFS estimates and our estimates are almost identical from 1965 to 1975 and reasonably similar through 1980 for both inshor and offshor fisheries. Beginning in 1981 we estimated considerably more days fished inshore than NMFS. Beginning in 1983 our estimates of days fished offshore range from 4% to 19% lower than NMFS estimates. A problem occurred in that much of the data does not have vessel identification numbers and cannot be sorted by vessel class, which is useful in policy analysis. A regression model was developed to estimate vessel length and size of nets for landings data where vessel characteristic data was missing. Regression equations were estimated for each year from 1965 to 1993. R-squares ranged from 0.74 to 0.94.

    Impacts
    (N/A)

    Publications