The Market Transfer Effect in the Hawaiian Longline Fishery: Why Correlation Does Not Imply Causation

Abstract

AcknowledgmentsThe authors would like to thank Earthjustice for funding an earlier version of this paper. AbstractA lot of discussion and controversy has surrounded whether the "market transfer" effect in the Hawaii longline swordfish fishery occurred during the swordfish closure of 2001-2004, because of its potential impacts on sea turtle mortality. The primary academic work in support of the market transfer effect during the closure is a paper by Rausser et al. (2009): "Unintended Consequences: The Spillover Effects of Common Property Regulations. " In this paper, the authors claim to find evidence in support of the market transfer hypothesis.To our knowledge, no analysis has yet been undertaken to assess whether this analysis is sound, and yet it remains the principle academic work in support of the market transfer effect. It is cited frequently in hearings and briefings in which the case is made to reduce fishing restrictions on US fleets. Our analysis shows that Rausser et al. is flawed; the authors erroneously linked the increased catch by foreign fleets in the EPO to the Hawaii closure, when in fact there is no evidence of a causal relationship.