Influence of a Century of Macroeconomic Change on U.S. Fisheries Production

Abstract

Trends in U.S. domestic commercial seafood landings during 1880–1995 coincide with changes in factors known to determine consumer demand for seafood and with technological innovations in transportation, power, food processing, and electronics that permeated the fishing industry. Although controversial, the repeated failures of centralized command-and-control management by the public sector to prevent overfishing and the resultant economic waste in the seafood industry draw attention to alternative property institutions that could make harvesters accommodate macroeconomic change in ways that sustain yield.

Notes

¹ Data are from the following annual publications of the U.S. National Marine Fisheries Service and its predecessors: Fisheries Statistics of the United States and, beginning in 1977, Fisheries of the United States. Menhaden landings averaged 1 billion pounds during this period and 2 billion pounds since the mid-1950s. During the 1950s and 1960s, landings of Pacific sardines that were reduced to industrial products averaged 400 million pounds and ranged up to 1 billion pounds.

² There are a number of estimators that are available to test for structural changes in time-series or regression parameters over time (e.g., switching models, variable parameters, and cusum and cusum-square; see Kennedy 1992). I did not attempt to compare the theoretical properties of these alternatives with the two-phase regression model or the empirical estimates.

³ It is not clear to me whether this iterative approach affects the inferential properties of the two-stage regression estimator. However, this procedure seems no more arbitrary than selecting a five-stage regression model (if one were available) after seeing the data. It is also superior to impressions. I am not aware of a generalized phase regression model which itself decides the number of change-points in a time series on the basis of statistical tests.

⁴ Ordinary least-squares results in biased estimation of the standard errors of the parameters when the residual process is autocorrelated (Kmenta 1971). Not correcting for autocorrelation causes significance tests to be biased.

⁵ See Royce (1989) for a history of fisheries management.

⁶ Throughout this paper, nominal prices and revenues were adjusted to constant 1990 dollars with the gross domestic product implicit price deflator in order to make comparisons across the time-series.

⁷ I do not mean to minimize the increase in fishing power which results from modifications of fishing gear. However, many of the incremental modifications can be traced to improved technologies, materials, or knowledge gained in other industries. For example, the Boats and Gear section of the August, 1997, issue of National Fisherman reports on how personal computer-based navigation systems “ride increased computer power into the 21st century.”

⁸ The Magnuson Act was recently amended by the Sustainable Fisheries Act of 1996 and renamed the Magnuson–Stevens Act.

⁹ Analogous case histories on the Gulf of Mexico shrimp fishery, the eastern Pacific Ocean yellowfin tuna fishery, the Pacific halibut fishery, and the Alaska Pacific salmon fishery are available upon request. These fisheries as well as the New England groundfish fishery were reviewed 20 years ago from biological perspectives by Benson (1970) and Alverson (1978).

¹⁰ It is also worth noting that the 16th century Dutch lawyer, Hugo Grotius, used property rights thinking, not romantic ideas, to persuasively argue for “freedom of the seas.” He maintained that property can exist only where exclusion of others can be enforced (see Scott 1988).

¹¹ The high costs of overcapitalization is a global problem. For example, the United Nations' FAO (1993) reported that global fisheries grossed $70 billion in revenues in 1989 but that they also ran a $54 billion deficit once the opportunity costs of capital are added to operating costs.

¹² The opportunity costs of rent-seeking will not be addressed here. Rent-seeking refers to the use of otherwise productive resources to gain profit through political or regulatory means at the expense of others in the industry. See Anderson and Hill (1983) for implications for future net benefits, and see Edwards (1994) for a survey directed at fisheries.

¹³ In the context of this statement, “common property system” is a misnomer. The phrase “common property” implies ownership by a community and exclusion of outsiders (Bromley 1992). There are many examples from around the world, including the United States, where common property systems have sustained use of renewable resources. “Common pool systems” would be the correct phrase because it implies that fishery resources are nonexclusive.

¹⁴ See Sherman (1995) on management of large marine ecosystems.

¹⁵ In his third footnote, Cheung (1970:50) specifically mentions “the ocean bed, the water, [and] the fish” as being components of fishing grounds.

¹⁶ Cheung (1970) is quite critical of the term “externalities” because much of the literature on this concept fails to address how transactions costs, legal impediments, or costs of information can preclude taking “externalities” into account in individual harvesting decisions.