Fewer Fish for Higher Profits? Price Response and Economic Incentives in Global Tuna Fisheries Management

Sun, Chin-Hwa; Chiang, Fu‐Sung; Guillotreau, Patrice; Squires, Dale; Webster, D. G.; Owens, M. J.

doi:10.1007/s10640-015-9971-4

Cited by 19 publications

(9 citation statements)

References 28 publications

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“…Elasticity of demand estimates for FAD free tuna depend upon the market segment, consumer environmental concerns, and availability of substitutes. Estimates indicate that elasticity is close to 1, implying that total revenues would not change (Sun et al 2017;Sun et al 2015). The three payment options could be combined to assemble the required amounts.…”

Section: The Tradeoffs Of Coasean-style Exchangementioning

confidence: 99%

Coasean Approaches to Ending Overfishing: Bigeye Tuna Conservation in the Western and Central Pacific Ocean

Ovando¹,

Libecap²,

Millage³

et al. 2020

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Bigeye tuna in the Western and Central Pacific Ocean were perceived as overfished for nearly 20 years, in large part due to incidental catch in the much larger skipjack tuna fishery. Efforts to halt the overfishing of bigeye stalled due to disagreements over the distribution of costs and benefits from reform. An alternative Coasean-style approach to setting both harvesting levels and the allocation of costs and benefits might offer a path forward. We calculate the costs and benefits of achieving bigeye conservation goals and describe an exchange through which benefits could be realized via removal of Fish Aggregating Devices (FADs). Through trade, aggregate benefits and costs are more apt to be in balance relative to mandated protection controls. The realities of bargaining costs in a 2 multilateral setting are not underappreciated, but in light of existing stalemates in this and other fisheries, consideration of Coasean-style approaches is warranted.

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Section: The Tradeoffs Of Coasean-style Exchangementioning

confidence: 99%

Coasean Approaches to Ending Overfishing: Bigeye Tuna Conservation in the Western and Central Pacific Ocean

Ovando¹,

Libecap²,

Millage³

et al. 2020

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“…The literature on the effect of consumer preference for species rarity on the rate of extraction is scant. There are a few studies demonstrating that consumer preference for species rarity retains the level of consumption even at exaggerated market prices (Gault et al ., 2008; Sun et al ., 2017). However, a strong preference for rarity alone is not sufficient to generate an anthropogenic Allee effect (Harris et al ., 2013).…”

Section: Rarity Value and Species Extraction From The Wildmentioning

confidence: 99%

Wildlife trade and consumer preference for species rarity: an examination of caged-bird markets in Sumatra

et al. 2019

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This study examines conservation effects of wildlife trade using demand and supply data from caged-bird markets in Sumatra, Indonesia. When consumers have a strong preference for species rarity, trade could result in wildlife overexploitation and species extinction. Results from a choice experiment show that buyers of caged birds indeed value species rarity. However, not all rare species are equally preferred. Species that are frequently traded lose their rarity value, even if rare in the wild. Analysis of time-series data collected from traders over a period of 20 months between 2013 and 2015 reveals an inelastic supply function for rare species, with market arrivals being insensitive to price changes. This may be due to a declining stock of rare species in the wild. Bird trade together with habitat loss can lead to extinction of a number of rare species in Indonesia. Several policy approaches on regulating caged-bird markets are discussed.

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“…[22], Holt [35] and Sun et al . [33][36] considerations leads to an alternative formulation by introducing new parameters d 1 and d 2 .…”

Section: A General Synthetic Inverse Demand System Approachmentioning

confidence: 99%

“…The demand system itself is subject to several ex-ante decisions on the part of the analyst concerning the appropriate market delineation (the limits of the relevant market). Several recent studies have shown strong globalization of the tuna markets [37–40] [33] and identified two separate market chains: purse-seine/cannery-grade and long-line/sashimi-grade tuna markets [41] [42] [9] [36]. Each of the two distinct markets, purse-seine/cannery-grade and long-line/sashimi-grade, are highly integrated at the global level by both price and commodity flows across locations and species, making any regional change in catches important to the entire industry.…”

Section: A General Synthetic Inverse Demand System Approachmentioning

confidence: 99%

“…Estimates of the responsiveness of price to landings would help inform policy analysis on the economic benefit of global quota management control and the impact of changes in fishing capacity upon the value of total landings. Success of quota control relies crucially on guaranteed higher profit when the quota is managed such that the net present value of the fishery resources is maximized in the long run [33].…”

Section: Introductionmentioning

confidence: 99%

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More landings for higher profit? Inverse demand analysis of the bluefin tuna auction price in Japan and economic incentives in global bluefin tuna fisheries management

et al. 2019

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This paper estimates the price changes in global bluefin tuna (BFT) markets in response to shifts in regional and global landings to evaluate the conservation and economic incentives from changes in the Total Allowable Catch (TAC) managed by all three Regional Fisheries Management Organizations. A fisherman’s income, and thus the financial incentive to accept management measures controlling catch levels, depends in part on how responsive price is to overall catch. Individual fisherman, with their own best interest in mind, used to wish to increase their individual landings and create an incentive to ask to increase the TAC for the industry, without realizing the possible revenue loss due to the resulting falling prices. To protect the value of all stakeholders’ property rights, a consensus to avoid abruptly raising the TAC, without first considering the potential loss due to market response, is needed. Alternatively, if revenue increases with lower TAC, a positive economic incentive for conservation is created if price increasing proportionately more than the lower supply, with harvest profits boosted by lower costs of production. To capture the complexity of substituting across various sources of supply and product form, a general synthetic inverse demand system is estimated to identify the impact of overall landings on BFT prices. This system estimates price flexibilities of both fresh and frozen longline-caught sashimi-grade tunas (Pacific, Atlantic and southern bluefins, and bigeye) at the Tokyo Center Market in Japan, including the Tsukiji Market, the world’s largest fish auction market that served as the single global price leader for BFT. The resulting estimation shows that own-quantity price flexibilities of every type of fresh and frozen BFTs are less than unity and inflexible in their own consumption. This creates poor individual producer incentives for fishermen to reduce wild or farmed BFT supply, as there is a chance to increase their own revenue, under the unlikely condition that the total supply is fixed. However, by observing the rapid increases in the TAC of Eastern Atlantic bluefin tuna (EABFT) in the coming years, suppliers may not be better off as price will drop proportionally faster and total revenue if the estimated scale flexibility is greater than one. Based on the estimated scale flexibility of frozen BFT, which is slightly less than unity, the frozen subsector of EABFT suppliers is the only winner under the supply increases. Suppliers of frozen BFT in other regions, fresh BFT (in the Atlantic and elsewhere), and southern BFT and bigeye tuna will all be harmed through lower revenue by the supply increases. Additionally, while total revenue might stay the same for frozen BFT suppliers, fishermen will potentially receive lower profits due to higher operating costs associated with increased landings when the supply of EABFT increases. Given the number of sectors that ultimately lose financially in the short term and given the ecological (and production) risks accompanying an abrupt in...

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Fewer Fish for Higher Profits? Price Response and Economic Incentives in Global Tuna Fisheries Management

Cited by 19 publications

References 28 publications

Coasean Approaches to Ending Overfishing: Bigeye Tuna Conservation in the Western and Central Pacific Ocean

Coasean Approaches to Ending Overfishing: Bigeye Tuna Conservation in the Western and Central Pacific Ocean

Wildlife trade and consumer preference for species rarity: an examination of caged-bird markets in Sumatra

More landings for higher profit? Inverse demand analysis of the bluefin tuna auction price in Japan and economic incentives in global bluefin tuna fisheries management

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