Efficient harvesting of fish stocks : the case of the Icelandic demersal fisheries

A detailed model describing the economics of harvesting self-renewable resources is constructed. The model is developed in terms of the particular case of the Icelandic demersal fisheries. Its basic structure is nevertheless general enough to apply to a wide range of other self-renewable natural resources. The model involves a biological submodel, describing the internal dynamics of the resources, an economic submodel, describing the technology and dynamics of the harvesting process, and a special function providing the link between these two submodels. Ecological interactions are represented by a mixture of deterministic and stochastic relations. The model is designed to cope with any finite number of self-renewable resources and harvesting technologies. In terms of fisheries it may thus be characterized as a multi-species, multi-fleet model. The particular empirical case investigated, involves 3 species of fish and 2 types of fishing vessels. An objective function, mapping harvesting results into efficiency levels is defined. Basically, this function specifies harvesting paths that maximize discounted economic rents as efficient. With the help of numerical search techniques, the model is employed to discover efficient harvesting paths for the Icelandic demersal fisheries. The control variables in this maximization process are (i) investment in the fishing fleets and (ii) the allocation of the fleets to fisheries and/or idleness. For the case of the Icelandic demersal fisheries, it is demonstrated that the current harvesting pattern is very inefficient and that an efficient harvesting path involves a significant reduction in overall fishing capital as well as a reallocation of the fishing fleets to the various fisheries. The sensitivity of the efficient harvesting path to various model specifications is briefly investigated. Finally, the model is used to investigate the properties of efficient harvesting paths under a number of economic and ecological specifications not necessarily related to the Icelandic demersal fisheries. One notable result of this investigation is that the existence of significant ecological interactions may invalidate certain economic relationships that are often taken for granted.