Table of Contents

Econometrics Informing Natural Resources Management

Econometrics Informing Natural Resources Management

Selected Empirical Analyses

New Horizons in Environmental Economics series

Edited by Phoebe Koundouri

This fascinating book outlines the fundamental principles and difficulties that characterise the challenging task of using econometrics to inform natural resource management policies, and illustrates them through a number of case studies from all over the world. The book offers a comprehensive overview of the broader picture of the state-of-the-art in econometrics as applied to environmental and natural resource management.

Chapter 15: Estimation of resource management objectives through empirical likelihood: can regulatory policies and economic optimization be reconciled?

Marita Laukkanen

Subjects: economics and finance, econometrics, environmental economics, environment, environmental economics, management natural resources

Extract

Marita Laukkanen Starting with Gordon’s seminal paper (1954) economists have been concerned about open access to fisheries resulting in dissipation of economic rents. Economics literature has proposed sole owner fisheries management as an alternative that produces socially optimal harvest levels.1 The declaration of 200-mile zones of extended fisheries jurisdiction in 1976 made explicit fisheries management reality, in that most important fisheries were brought under the authority of adjacent coastal nations. Management authority has generally been given to government agencies or intergovernmental organizations. While economists have been influential in introducing socioeconomic goals into fisheries management, much of real world fisheries policy continues to emphasize biological goals and short-term political considerations. From an economic point of view conservative concern for stock safety may result in building up stocks that are more than economically optimal. Stressing profits that are forgone during stock recovery, on the other hand, may mean conserving less than would be optimal. Economic analysis of regulatory impact has largely focused on how regulations should be constructed in order to steer fisheries toward the rent maximizing ideal of sole owner management. Homans and Wilen (1997) point out that in practice virtually no fisheries operate under open access or sole owner management. They introduce a model of regulated open access resource use, where entry to the fishery is free but harvest is subject to regulations imposed by a management agency. They assume that the regulator chooses target harvest levels according to a safe stock concept, and estimate a regulator’s quota...

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