Economic analysis of spatially heterogeneous resources: The case of the fishery

Abstract

This dissertation investigates the implication of combining economic and ecological models in an effort to expand our knowledge of the complex problems associated with resource management. The motivation for this research arises from the perceived need to develop a better understanding of how the flow dynamics within a resource affect the efficient management of that resource. Following the introduction, the second chapter experimentally tests the theoretical models of agent behavior in patchy resource environments under both sole-ownership and competitive extraction regimes. In each setting experimental results indicate that subjects over-allocate vessels to regions that possess the greatest rates of emigration within the bioeconomic system relative to the theoretical predictions. This introduces a "spatial externality" because over-harvesting in one region reduces the harvest in the surrounding regions. The third chapter proposes a potential solution to the problems associated with a spatial externality by analyzing the use of marine reserves in the presence of a heterogeneously distributed resource. This is conducted by introducing the presence of biological "hot spots" (areas within a fishery that possess a larger growth potential than the surrounding areas) with spatial rates of migration into the current economic theory. Simulation results indicate that the presence of biological hot spots within a fishery creates an environment within which it is optimal to establish a marine reserve that increases the value of the fishery. The fourth chapter makes use of my earlier experimental and simulation research, which indicate that locational choice and the spatial distribution of effort should affect the management of the fishery. Within this chapter a spatial Heckit model is developed to empirically investigate for the presence of herding behavior among yellowfin sole and Pacific cod fishermen in the Eastern Bering Sea. Econometric results provide support for herding behavior among fishermen within the yellowfin sole fishery. Moreover, fishermen respond to the lagged biomass and spatially weighted biomass signals as significant determinants of locational choice. This results in Lotka-Volterra oscillations in the Pacific cod fishery. In the final chapter of this dissertation, the general findings are concluded and some future avenues of research are discussed.