Estimation of a Generalized Fishery Model: A Two-Stage Approach
34 Pages Posted: 18 Apr 2007 Last revised: 18 Mar 2014
Date Written: November 8, 2009
U.S. federal law calls for an end to overfishing, but measuring overfishing requires knowledge of bioeconomic parameters. Using micro-level economic data from the commercial fishery, this paper proposes a two-stage approach to estimate these parameters for a generalized fishery model. In the first stage, a fishery production function is consistently estimated by a within-period estimator treating the latent stock as a fixed effect. The estimated stock is then substituted into an equation of fish stock dynamics to estimate all other biological parameters. The bootstrap approach is used to correct the standard errors in the two-stage model. This method is applied to the reef-fish fishery in the northeastern Gulf of Mexico. The traditional method, which uses catch-per-unit-effort (CPUE) as a stock proxy, significantly overstates the optimal harvest level.
Keywords: fishery management, latent stock, panel data, two-stage estimation
JEL Classification: Q22, C33
Suggested Citation: Suggested Citation