Estimating Heterogeneous Capacity and Capacity Utilization in a Multi-Species Fishery

Center for Policy Research Working Paper No. 86

36 Pages Posted: 20 Apr 2011

See all articles by Ronald G. Felthoven

Ronald G. Felthoven

National Oceanic and Atmospheric Administration

William C. Horrace

Syracuse University - Department of Economics

Kurt E. Schnier

University of Rhode Island - Department of Environmental and Natural Resource Economics

Date Written: November 1, 2006

Abstract

We use a stochastic production frontier model to investigate the presence of heterogeneous production and its impact on fleet capacity and capacity utilization in a multi-species fishery. Furthermore, we propose a new fleet capacity estimate that incorporates complete information on the stochastic differences between each vessel-specific technical efficiency distribution. Results indicate that ignoring heterogeneity in production technologies within a multi-species fishery, as well as the complete distribution of a vessel’s technical efficiency score, may yield erroneous fleet-wide production profiles and estimates of capacity. Furthermore, our new estimate of capacity enables out-of-sample production predictions predicated on either homogeneity or heterogeneity modeling which may be utilized to facilitate policy.

Keywords: fishery capacity, heterogeneous production, latent class modeling

JEL Classification: C23, D24, N50

Suggested Citation

Felthoven, Ronald G. and Horrace, William C. and Schnier, Kurt E., Estimating Heterogeneous Capacity and Capacity Utilization in a Multi-Species Fishery (November 1, 2006). Center for Policy Research Working Paper No. 86, Available at SSRN: https://ssrn.com/abstract=1815316 or http://dx.doi.org/10.2139/ssrn.1815316

Ronald G. Felthoven

National Oceanic and Atmospheric Administration

William C. Horrace (Contact Author)

Syracuse University - Department of Economics ( email )

Syracuse, NY 13244-1020
United States
315-443-9061 (Phone)
315-443-1081 (Fax)

HOME PAGE: http://faculty.maxwell.syr.edu/whorrace

Kurt E. Schnier

University of Rhode Island - Department of Environmental and Natural Resource Economics ( email )

Kingston, RI 02881
United States

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