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Q0, Q2
Introduction
Bioeconomic modelling in sheries integrates economic and biological inuences
with the goal of assisting natural resource managers in determining appropriate levels
of stock and catch. Normally, such models assume environmental conditions in the
ambient marine ecosystem remain constant, but this need not be so. Given the complexity of ecosystem functioning, the depiction of ecological systems within bioeconomic
models is inevitably simplistic and this has led to criticism (Perrings et al. 1995, Van der
Ploeg et al. 1987). Since analytical models with more than a few variables quickly
become intractable, restricting the interaction with the environment to a few equations
is also an appealing feature of bioeconomic models. That said, recent interest in nonlinearities, discontinuous change, critical thresholds and ecosystem stability, has
revealed new opportunities for bioeconomic modelling from an ecological perspective
(Perrings & Pearce 1994, Perrings et al. 1992, Common & Perrings 1992, Perrings 1991,
Holling 1973). Modications to the basic bioeconomic model to capture some of the
above concerns exist, including the integration of stochastic elements (Costello et al.
2001, Johnston & Sutinen 1996, Reed 1988, Andersen & Sutinen 1984). For surveys of
the conventional bioeconomic model, see Eggert (1998), Conrad (1995), Munro (1992),
Clark (1985, 1990), Munro & Scott (1985) and Wilen (1985).
164
KNOWLER
165
cE
where X is the stock size, r is the intrinsic growth rate of the harvested population,
K is the harvested population's natural equilibrium size or the system's carrying
capacity, h is harvest, q measures the efciency of the shing eet or the catchability
coefcient, E is the harvesting effort, p is prots and p and c are the output and effort
prices, respectively.
The rst equation in (1) is a logistic stock growth function and its shape relies on the
two biological parameters, r and K. The Schaefer harvest function is the second
equation in (1) and it relies on a simple multiplicative relationship between stock, effort
and catchability.3 Finally, (1) includes a standard prot expression comprising harvest
revenues less harvesting costs.
Ignoring stock growth, the following simple short run prot maximizing condition
can be derived for a given stock size X0 :
p
c
qX0
Expression (2) states the standard result that effort should be expended, and harvest
taken from a stock of xed size, up to the point where price equals marginal cost.
A more realistic static model would take into account resource renewal and
incorporate stock growth. Still maintaining a prot-maximizing stance, but assuming
166
KNOWLER
a sustained yield is to be harvested, a sustained yield curve dening all points where h
equals F(X) can be generated. Equating the rst two expressions in (1) and then
substituting the resulting expression into the harvest function yields:
h qKE
q2
KE 2
r
Expression (3) denes a sustained yield curve in harvest-effort space that is parabolic in
shape. The curve has its maximum at K/2, a point also known as the maximum
sustainable yield (MSY). The prot maximizing combination of inputs X and E is
now easily determined using (3) and the prot function in (1).
Gordon (1954) shows that in the absence of entry limitations, total revenues and
costs will eventually equilibrate and all resource rent will be dissipated. He refers to this
situation as the `bionomic equilibrium'. Under open access, the equilibrium stock size
can be determined by setting the prot function from (1) equal to zero and then solving
for the stock variable. In the basic Schaefer-Gordon model, this leads to an equilibrium
stock size of:
X1
c
pq
1=m
167
The authors use (5) and W, the unit wage paid to harvesting effort X1 , to derive a
marginal cost function. In keeping with standard prot-maximization, marginal cost is
then set equal to the market price determined by (6) and the resulting expression is
rearranged to give a statement for the equilibrium level of harvest:
Q
ha
K 1=m A1=a X2
W
b=a
ima=m1
ma
where Q is the equilibrium level of harvest. Using (7), they derive statements for the
change in consumers' and producers' surplus as the environmental variable X2 changes.
While the result portrayed in (7) appears complex, under certain parameter assumptions it is equivalent to the basic static sheries model result contained in (2), with the
addition of an environmental inuence on stock growth. Freeman (1991) extends
the Ellis & Fisher (1987) analysis to the open access situation and demonstrates that
net social returns are not necessarily lower under open access. In the end, the EllisFisher-Freeman models make the important points that static bioeconomic models can
take account of environmental inuences and they can capture the welfare effects from
environmental change correctly, but this requires explicit consideration of the institutional arrangements governing the shery.
Kahn (1987) provides a second static model incorporating an environmental inuence on the harvesting of a natural population. He assumes the resource manager can
control the level of an environmental input affecting a natural population but not the
level of harvesting effort and, therefore, he models bioeconomic equilibrium. Kahn's
approach is based on conventional production economics under conditions of open
access, with average cost and inverse demand functions specied as:
AC ACC, ri , X
Y
C, rs , S
where AC is the
Q average harvesting cost, C is the harvest, ri is a vector of input prices, X
is stock size, is the price in an inverse demand function, rs is a vector of substitute
good prices and S is a vector of socioeconomic characteristics of the relevant population.
Environmental inuences enter the model via stock determination. The model's
population dynamics are specied using a logistic function and it is assumed that the
stock is subject to sustained yield harvesting:
X
C rX 1
9
K
where r and K are the intrinsic growth rate and population carrying capacity, respectively. By assuming steady state harvesting, Kahn need not include a distinct
harvest production function. Environmental quality may inuence carrying capacity
K, or the intrinsic growth rate r, or both variables.4 Kahn models K as a function of
environmental variables qi , expressing this as K f qi. He then derives a reduced
168
KNOWLER
form model by substituting the latter relationship into the logistic stock growth
function. With catch now expressed in terms of stock and environmental variables,
expression (9) can be substituted into the average cost and inverse demand curve
statements contained in (8).
Kahn demonstrates how the welfare effects of changes in environmental quality can
be estimated from his model. Critical to his approach is the differentiation of the welfare
effects stemming from environmental change from those resulting from unrelated
changes in harvesting. However, the model captures adjustments in harvesting which
are in response to the environmental quality change, since harvesters will modify their
level of effort to restore bioeconomic equilibrium under the new circumstances. Kahn
begins with the following expression for the annual net benets under constant environmental conditions:
C
hY
i
MC dC
10
169
importance for policy implementation: whether a moratorium is instituted on harvesting to allow the most rapid restoration of stocks or this is allowed to take place
gradually is not a trivial matter to those doing the shing and, by inference, to resource
managers. Moreover, the discount rate is totally ignored in the static model and yet its
importance cannot be underestimated in addressing environmental and resource
issues. In fact, the optimal stock size for a given shery will vary depending on whether
a static or dynamic approach is used if the discount rate is not zero. Again, the
proliferation of descriptions of the basic dynamic model make it unnecessary to go
into great detail here, so only a thumbnail sketch of the model is provided (see the
sources cited earlier, especially Munro 1992 and Clark 1990).
The standard dynamic bioeconomic model
To restate the bioeconomic model in dynamic terms requires the use of optimal control
theory whereby variables such as harvest, shing effort and sh stock are expressed as
functions of time.6 A general formulation of the dynamic problem in continuous time,
allowing for linear and non-linear functional forms and assuming downward sloping
demand, might look as follows:
8
9
1
< h
=
max
phtdh Cht, X t e dt dt
:
;
0
dX
X_ F X t
dt
ph < 0, Ch > 0, CX < 0
subject to:
ht, X 0 given
11
where h(t) is the harvest at time t, p[h(t)] is a downward sloping inverse demand
function, X(t) is the resource stock at time t, C[h(t),X(t)] is the cost function, F[X(t)]
is the stock growth function and d is the discount rate. Note that increasing the harvest
raises total costs while higher levels of the resource stock reduce costs. In optimal
control terminology, harvest h constitutes the variable subject to manipulation or
control, while X represents the stock affected by the control variable h and is referred
to as the state variable. The objective function in (11) is subject to a biological constraint
or equation of motion, which describes growth in the state variable X as the natural
stock growth F(X) less any harvest h.
Dropping reference to time and representing p[h(t)]dh as D(h), the problem posed
by (11) is solved by rst formulating the current value Hamiltonian:
~ X , h; l Dh
H
Ch, X lF X
12
where l is the adjoint or costate variable and other variables and functions are as
dened previously.
The rst order conditions associated with a maximum of the Hamiltonian expression
in (12) can be used to derive a differential equation system dening the optimal time
170
KNOWLER
paths of h and X. Assuming that a long run equilibrium or steady state exists, then this
equation system can be used to nd the steady state solution values for h and X.
The procedure described above pertains to the case where a sole owner or manager of
the resource maximises resource rents. With open access, an alternative procedure is
required in recognition that unrestricted entry and exit from the industry leads to the
dissipation of economic rents in the long run. This procedure captures the response of
harvesters to changing prot conditions using an expression for adjustments in harvesting capacity in place of the objective function in (11). In its simplest form, the following
multiplicative specication for this adjustment process is used (Smith 1969):
E_ kp
13
where k is a scalar adjustment factor and p is industry prots. With this approach, it is
assumed that entry and exit are constrained in various ways (e.g. vessel construction
lags), so that the dissipation of existing resource rents is not accomplished instantaneously. Assuming capital is malleable, k might take different values depending upon
whether current period prots are positive or negative (Bjorndal & Conrad 1987).
Other more complex formulations of the adjustment process are possible (Berck &
Perloff 1984), including the use of game theory approaches (see Sumaila 1997).
Expression (13) and the equation of motion from (11) comprise a system of two rst
order differential equations that can be solved for the open access equilibrium by
iterating forward from initial conditions X(0) and E(0). In effect, a simulation procedure is employed that may converge to a steady state solution. A discrete time specication produces more complex dynamics, including deterministic chaos (Conrad 1995).
Dynamic models with environmental quality
Freeman (1993) extends the basic dynamic bioeconomic model in (11) by including an
additional explanatory variable q, representing an environmental inuence. He connes his analysis to the simple case where environmental quality is not subject to control
and changes in environmental quality occur exogenously. Thus, q can be treated as a
xed factor of production or even as a parameter, as indicated by an overhead bar on
this term. To avoid added complexity only this simple case is presented below.7
Using the standard formulation for a dynamic bioeconomic system, Freeman
hypothesises an environmental inuence affecting both the cost function and stock
growth. The optimal management version of the problem can be presented as:
8
9
1
< h
=
max
phtdh Cht, X t, q e dt dt
:
;
0
subject to:
dX
X_ F X t, q ht, X 0 given
dt
ph < 0, Ch > 0, CX < 0, Cq > 0
14
171
where all variables, parameters and functions are identical to those used in (11) except q,
which is the xed environmental input. The current value Hamiltonian for (14) is:
H X , h;l Dh
Ch, X , q lF X , q
15
and the rst order conditions describing the maximum of the system are identical to
those for (11) except that now the equation of motion contains q as an argument. The
system can be solved for a given initial stock level X(0) and xed level of the environmental input q. Optimal time paths for the critical variables will depend on q as will the
solution values for the system at its steady state. Thus, when designated as a xed
production factor and not subject to control, the presence of an environmental inuence does not alter the procedure for solving the dynamic bioeconomic problem.
The comparative dynamics of a non-marginal change in environmental quality in the
dynamic model are of particular interest. As in the static case, the social returns from
optimal harvesting are determined for the situation without a change in environmental
quality and then compared to the social returns with the change. The difference
represents the welfare effect of the change. Altering the environmental input has
implications for the optimal harvest rate and stock level in each period, so that these
might be expected to differ in the with and without scenarios, as would the associated
consumers' and producers' surpluses. Ellis & Fisher (1987) show the proper formulation for estimating the relevant welfare effect in the dynamic model, assuming an
innite time frame and optimal management:
1
DW
CS
q PS
q e
0
dt
dt
CSq0 PSq0 e
dt
dt
16
where W measures welfare in economic terms; CS and PS are consumers' and producers' surpluses, respectively; and 0 and 1 refer to the values of the environmental quality
variable q without and with the change, respectively.
If open access harvesting conditions exist with an environmental inuence present,
then the dynamic model comprises the two equation system described earlier, but now
one or both system equations will contain q as an argument. When simulated from
initial conditions, the system's behavior will depend on the value of this term. As a
result, a change in environmental quality will lead to time paths for key variables that
diverge from the no-change scenario and the welfare change associated with these
divergent paths can be assessed. If demand relies on environmental quality, then a
problem also found with the static model can be anticipated: changes in environmental
quality might be expected to have little or even negative welfare effects in an efciency
sense, depending upon the elasticity of demand (Freeman 1991).
Case studies of bioeconomic modelling with environmental inuence in sheries
Relatively few studies have estimated the effects of changing environmental conditions
on harvested populations, and most that do are of the static variety. Bell (1972) was one
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KNOWLER
of the rst to incorporate a habitat variable into an empirical model of a shery, but the
inuence was water temperature and not a variable typically subject to control by
management. More recent efforts can be grouped according to the type of inuence
analyzed. Several static analyses have considered the outright loss of habitat, perhaps
integrated into a broader analysis of the economics of land use conversion. In contrast,
another group of static analyses examines modications in habitat quality brought
about by pollution externalities (e.g. nutrient and suspended sediments) and altered
salinity levels. Several applied studies incorporate dynamic considerations, but because
applied dynamic modelling is more difcult and demanding of data, there are far fewer
examples than for the static case. An example drawing on recent modelling of sheries
and pollution in the Black Sea is described below.
Applied static bioeconomic models with habitat loss
All of the studies reviewed in this section are concerned with valuing the loss of coastal
wetland or mangrove habitat that is converted to alternative land uses or destroyed in
other ways. One study analyzes the Florida Gulf Coast blue crab shery, which relies on
threatened coastal mangrove forests as breeding habitat. Using this habitat as the
environmental input, Lynne et al. (1981) derive a simple static equilibrium model for
the blue crab shery. They dene the maximum potential crab stock or habitat carrying
capacity as a linear function of the natural logarithm of the mangrove area. Making this
substitution, the equation used for estimating the link between catch and mangrove
area in reduced form is:
Ct b0 b1 ln Mt 1 Et
b2 ln Mt 1 Et 2 b3 Ct
et
17
where C is catch, M is mangrove area, E is catch effort (as measured by the number of
crab traps set) and et is an error term. Subscripts refer to time periods and help in
distinguishing lagged mangrove area and catch, which are retained in the nal equation. Taking the relevant partial derivative for catch with respect to marsh area and then
multiplying this by the dockside price of crab yields an implicit value for the marsh area.
Ellis & Fisher (1987) point out that the resulting values do not adhere to welfare
measurement involving consumers' and producers' surplus.
In a similar study, Barbier & Strand (1998) examine the linkage between shrimp
production and mangrove habitat in the Bay of Campeche, Mexico. Harvesting of
shrimp by artisanal and industrial vessels is an important regional economic activity,
but is subject to open access. Over the period 19801990, the mangrove area declined by
2.3% as a result of expanding economic activity in the area. As in Lynne et al., Barbier &
Strand (1998) use a basic Schaefer-Gordon static equilibrium model with carrying
capacity expressed as a linear function of the mangrove area. They arrive at the
following reduced form catch equation, which is similar to that of Lynne et al.:
ht b1 Mt Et
b2 Et2 et
18
173
where h is the shrimp catch, M is the mangrove area, E is a composite harvesting effort
variable and et is the error term. Using data for the period 198091, regression estimates
were made for the composite parameters b1 and b2 . Similarly to Lynne et al., Barbier &
Strand nd statistically signicant interactive effects, conrming that habitat and effort
do not inuence catch independently.
Using the estimated relationship, the authors derive the comparative static effects of
changes in mangrove area. Setting prots at zero, consistent with an open access
management regime, they nd that a one unit decrease in mangrove area (per km2 )
results in an average reduction in annual shrimp harvests of 14.4 mt and a loss in
revenues of US$ 140 000 per year (1982 prices). This marginal valuation is contingent
upon the level of harvesting effort and diminishes as the level of effort increases. Thus,
the marginal impact of mangrove loss actually declines from 18.6 mt per year to 8.4 mt
over the period studied, reecting a steadily increasing level of effort.
Applied static bioeconomic models with habitat quality modications
Fish catches may be affected by changes in habitat quality as well, either directly or via
intermediary processes such as eutrophication, the loss of submerged vegetation,
salinity changes or increases in suspended sediments. A number of researchers have
considered the impact of nutrient ows and toxic pollution on the sh resources of the
East Coast of the U.S. For example, Kahn & Kemp (1985) assess the economic losses
from the destruction of submerged aquatic vegetation (SAV) due to excessive nutrient
and suspended sediment loads in Chesapeake Bay. They model the impact of this
degradation on the open access striped bass commercial shery using the theoretical
framework developed by Kahn (1987), reviewed earlier.
Kahn & Kemp (1985) estimate an equilibrium catch equation and industry supply
and demand curves. To estimate the former, carrying capacity is modelled as a function
of the availability of SAV. The following relationships are used for equilibrium catch
(C e ) and carrying capacity (FC ), with these variables expressed in relative terms and the
choice of the parameter in the equilibrium catch equation reecting assumptions about
compensatory mortality:
Ce F
FC 1:36
0:85 2
F
FC
e
1:004V 0:975
19
where F is the sh stock or some index measuring its size and V is the level of SAV.
Taking these two expressions together, equilibrium catch can be expressed as a function
of SAV, similarly to the equations presented earlier relating mangrove area to shrimp
catch.
The supply curve is estimated as a log-linear function of the relative prices of
alternative target species, the cost of effort, the striped bass stock and a time trend.
Striped bass demand is modelled as a function of the price of striped bass, the prices of
substitute consumer goods, regional socio-economic variables and a time trend.
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KNOWLER
Kahn & Kemp (1985) use the three estimated relationships to derive the welfare
losses from declining SAV. By holding all the system variables constant except the
catch, the price of striped bass and the sh stock, the three equations can be solved for
the equilibrium values of these three variables. This locus of biological, demand and
supply curves is referred to as the bioeconomic equilibrium of the system. As the level of
SAV is then varied, the change in this bioeconomic equilibrium is assessed and changes
in consumers' and producers' surpluses can be estimated. Using this procedure
(together with an allowance for sport shing losses), a marginal damage function is
derived showing the economic losses associated with varying levels of SAV.
Whereas the Chesapeake Bay study assesses the effects of nutrients on sh stocks
with submerged aquatic vegetation as the intermediary, Swallow (1994) considers
modications to estuarine salinity in the Pamlico Sound area of North Carolina and
its effects on local shrimp catches. Changes in salinity result from enhanced freshwater
ows into the estuary, which in turn arise as nearby wetlands, which normally inhibit
freshwater ows, are converted to alternative uses. A decline in estuarine salinity
reduces juvenile shrimp survival, culminating in decreased adult stocks and, by inference, falling commercial catches. Thus, the Swallow study concerns downstream effects
on habitat quality resulting from land use changes and not habitat loss per se.
Making use of a static partial equilibrium analysis, Swallow (1994) establishes the
complex linkages between changes in land use and shrimp catch by invoking a simple
causal model that again draws on the modelling approach suggested by Kahn (1987).
Concentrating on coastal-freshwater or pocosin wetlands, he develops the following set
of empirical relationships to describe the shrimp-wetland system:
pi pi ki XFBj Lbi
XFB gSAL
SAL hPOC
ws Li
20
175
176
KNOWLER
Table 1. Tradeoffs between timber harvests and sh production over 30 years, Siuslaw National Forest,
Oregon (US$ '000, 198084 prices).
Management
alternative
Timber
production
(MMCF)
Timber
area
(Acres)
Catchable
salmon
(nos.)
Catchable
steelhead
(nos.)
Commercial
salmon revenues
($ '000)
Current direction
15.52
84000
8760
3234
1147
Timber emphasis
15.16
86700
9501
2943
1130
Fish emphasis
7.88
45150
11.092
3451
1461
Minimum management
12323
3751
1693
15125
3761
1773
Natural conditions
sheries but from the terrestrial realm. Hammack & Brown (1974) estimate the nonmarket benets of waterfowl hunting using a contingent valuation study and model the
population dynamics for continental waterfowl including breeding sites (prairie ponds)
as an environmental inuence.
A more recent example from marine sheries concerns modelling of nutrient-induced
eutrophication and its impact on the commercial anchovy shery in the Black Sea
(Knowler & Barbier 2001, 2000). Increasing nutrient loads have reduced the quality of
sh habitat for many benthic species. However, it has had the reverse effect on small
pelagics like anchovy, since these species are not much affected by algal blooms and
other eutrophication-related events, and benet from increased marine system productivity. As a result, the role of nutrients as an environmental inuence is modelled as a
positive effect on anchovy recruitment. Complicating the picture was a shift in environmental conditions in the Black Sea in the mid 1980s, due to the accidental introduction of the comb-jelly Mnemiopsis leidyi. Mnemiopsis preys on anchovy juveniles,
reducing the anchovy's potential stock size and offsetting the perceived benets from
increasing nutrient loads.8 For this reason, two historical periods are modelled, a preMnemiopsis period (197186) and a subsequent period with Mnemiopsis present (1987
1993). A structural change approach is used to capture the shift between marine system
regimes.
Setting harvest h as the variable subject to management control, and formulating the
model in discrete rather than continuous time, results in the following problem under
optimal management:
max
1
X
rt fpht
CXt , St g
t0
21
177
initial cost function with X representing the exploitable anchovy stock; s is the natural
survival rate for anchovy escaping the harvest, X h, with the latter represented as S;
Ri is the anchovy recruitment function, structurally differentiated according to whether
Mnemiopsis is present (i 2) or not (i 1); and P is the coastal phosphate concentration, the environmental inuence.
The recruitment specication was modied to accommodate the ecological complexity of the Black Sea case study (not described here), and the nal recruitment function
was estimated using multiple regression. Based upon the familiar Ricker curve (Ricker
1975), the following two recruitment expressions with phosphates as an environmental
inuence were obtained:
Pre
0:000614St
0:001624St
22
The cost function was derived from an estimate of the harvest function that used time
series data for anchovy stock, catch and shing effort (measured as active vessels).
Substituting anchovy escapement S for the term X h, the resulting cost function is:
CXt , St 80, 000ln Xt
ln St
23
Initially, the concentration of phosphates was set at 5.5 mM, its average value in the
northwest shelf of the Black Sea during the period. Inserting this parameter and several
others, the resulting empirical model is solved, producing a set of optimal solutions for
anchovy catch, stock, recruitment shing effort and prots for the two scenarios (preMnemiopsis and with Mnemiopsis). A second set of solution values was derived based
upon a hypothetical 50% reduction in the phosphate level (to 2.75 mM). As discussed
earlier, the correct measure of the long run welfare change induced by nutrient abatement is calculated as the difference in prots (producers' surplus) earned with and
without the change in environmental quality, since the perfectly elastic demand curve
rules out any consumers' surplus benets.
The resulting values calculated for both scenarios show that: (i) pollution control
would have actually reduced prots in the anchovy shery, and that (ii) the impact
would have been much greater during the period before Mnemiopsis entered the
Black Sea (see Table 2). With the establishment of the invader, the productivity of the
anchovy stock declines so signicantly (as do shery prots) that the effect of nutrient
abatement is relatively small.
Conclusions
This review of bioeconomic modelling incorporating environmental quality suggests
several conclusions. It is clear that both the greatest strength and weakness of
the theoretical bioeconomic framework is its scaled-down description of complex
178
KNOWLER
Table 2. Equilibrium prots in the Black Sea anchovy shery for the pre-Mnemiopsis and Mnemiopsis
periods (US$ thousands, 1989/90 prices).
Historical period
Pre-Mnemiopsis (197186)
With Mnemiopsis (198793)
Welfare Change due to Mnemiopsis
No Pollution
control
50% Reduction in
phosphates
17 080
14 336
2744
290
138
152
16 790
14 198
phenomena. Even with this limitation, environmental quality may appear in various
forms within a bioeconomic model, either as input to commercial sheries production
or as an argument entering the utility function of consumers directly. This paper has
been concerned with the former case, and with measuring the welfare effects of a nonmarginal change in such an environmental input. It is possible to integrate an environmental inuence on the input side of the bioeconomic framework in a variety of ways,
either as habitat loss or modication, for example. But this inuence can extend to
discontinuous shifts in ecological states and related phenomena. Although many
analyses are concerned with rent maximisation under commercial or sports harvesting,
modications can be made to the basic format to accommodate other objectives and
management regimes (e.g. open access). Incorporating increasing complexity to
accommodate the realities of both real world economies and ecosystems remains an
important direction for future research.
Empirical studies that have integrated environmental inuences into bioeconomic
models were reviewed as well, and a number of lessons for future research emerge from
this review. For example, it is inevitable that much of the empirical research simplies
the ecological and economic characteristics of the systems investigated, perhaps
beyond the needs of theoretical modelling. In order to estimate the parameters of
interest numerous studies take a highly aggregated approach, do not model population
dynamics, or make a highly optimistic assumption of static bioeconomic equilibrium.
Opportunities to avoid such simplication should be explored. Applied bioeconomic
models incorporating environmental inuences also require unusually extensive data
sets, especially in the dynamic case. As a result, few applied dynamic analyses have been
undertaken. Due to data constraints, welfare changes in the empirical studies are not
always measured consistently with economic theory, and in some instances simple
changes in gross revenues are used for the purpose. Improving economic, biological
and environmental data sets should be a priority, especially in the developing country
context.
Despite these shortcomings and others cited earlier, bioeconomic modelling has
found justied support amongst many researchers. For example, Johansson (1987,
p. 160) refers to the approach as `an interesting and promising one'. Further efforts to
improve such models as a means to capture the economic implications of environmental change are warranted.
179
Acknowledgements
This research was completed with the generous nancial support of the Social Sciences
and Humanities Research Council (SSHRC) of Canada, grant number 752-95-0482.
The author would also like to thank an anonymous referee.
Notes
1. Freeman (1995) provides a good review of empirical studies of recreation benets (including sport shing)
arising from improving water quality.
2. For more general reviews of the environment treated as a production factor, see Point (1994) and Maler
(1992).
3. In fact, the Schaefer harvest function is usually portrayed in continuous time and is in this sense an
expression for the instantaneous rate of harvest. In discrete time, the function must be integrated over the
full harvest season and takes on a somewhat different form. When used in discrete time, the specication
presented here is actually a restricted Cobb-Douglas production function.
4. Which of the two population parameters is affected by an environmental input is not trivial, as the two
parameters affect long run stock size and optimal harvesting effort differently (Freeman 1993).
5. The McConnell & Strand (1989) model is interpreted here as static, although they present elements of it in a
dynamic form without discounting.
6. See Conrad & Clark (1987) for a further elaboration of the dynamic sheries model using optimal control
techniques.
7. More complex specications are obviously possible, such as when the environmental input is a food item
consumed by a natural population and therefore depletable.
8. It has been speculated that the two conditions, nutrient enrichment and the success of Mnemiopsis, might
be linked, leading to more complex modelling implications. For a discussion of these, see Knowler &
Barbier (2000).
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