Essays on Bristol Bay Sockeye Salmon Commercial Fishery – Management Policies and Pricing Mechanism
Wang, Yun-Ling Jocelyn
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This dissertation consists of three manuscripts studying management policies and ex-vessel pricing mechanism observed in the world’s largest wild sockeye salmon run – Bristol Bay. For the first manuscript, we develop a comprehensive management strategy evaluation technique to evaluate whether increase in the number of fish allowed up each river to spawn (escapement) could improve fishery outcomes for the industry and the region. Our model shows that interannual variance for each district increases as escapements increase, leading to higher mean and variance of fish returns. Since industry is unable to capture greater value during the high-run years while suffering from more frequent low run years, average catch does not necessarily increase. When average value generated is higher relative to the status quo, additional rent is distributed unevenly across harvesters depending how flexible they are in moving between districts. Second manuscript studies the impact of mobility restrictions in relation to area specific run variability that could otherwise be avoided. Using estimated Bristol Bay harvesters daily-district specific production function, we simulate harvester equilibrium behavior for three policies with different degrees of mobility restriction. We find that equilibrium predicted individual harvester catch is the highest under the least mobility restriction (vice versa). We then introduce district-specific stochastic shocks to the run. The policy with the most mobility restriction subjects harvesters to the highest downside risks than the other two policies. The last manuscript studies the post-exchange pricing mechanism observed in the Bristol Bay’s ex-vessel pricing market under the experimental setting. The post-exchange pricing mechanism is thought to be inducing processors to behave collusively. We provide an alternative explanation, risk-sharing hypothesis, and test it out using the price-at-exchange pricing mechanism as the empirical benchmark. We find that in the case of certainty, collusion theory may better explain the post-exchange pricing, as supported by the price-at-exchange processors paying on average higher ex-vessel price than the post-exchange processors. However, with introduction of risks, we observe the price-at-exchange processors paying on average lower ex-vessel price than the post-exchange processors, supporting our risk-sharing hypothesis. Furthermore, we find that repeated interaction is key in supporting the post-exchange pricing mechanism.
- Economics