Risk Mitigation in the West Coast Commercial Fishing Fleet

Abstract

Physical and financial risk are inherently part of the commercial fishing industry. Working in rough seas for long hours with heavy equipment is notoriously hazardous and harvesters face some of the highest fatal and non-fatal occupational injury rates. Harvesters also face some of the highest financial risk across occupations as their income can vary greatly from demand shifts, stock variability, and regulations. In the following thesis, I examine how West Coast harvesters manage both physical and financial risk by utilizing data from two surveys of over 1400 U.S. West Coast fishing vessel owners. I explore what drives health insurance uptake by individual harvesters and how health insurance is used as a risk management tool. Health insurance uptake is found to primarily be driven by variables associated with health insurance cost rather than the benefit. Additionally, I find that health insurance coverage declined for West Coast commercial harvesters from 2017 to 2020. The drivers of individual responses to fishery closures are explored to understand different motivations and abilities to respond to closure driven financial risk. My results suggest that wealth drives individuals to avoid taking non-fishing work and community level economic health impacts an individual’s ability to respond to a closure. Income diversification strategies of fishing different species or working outside of commercial fishing are found to be flexibly utilized when an individual faces a closure. Finally, I explore how income diversification as a risk mitigation strategy affects financial health as measured through credit scores. This work establishes a foundational understanding of West Coast fishery participants’ relationship with credit health, finding that high credit scores are prevalent across the industry. I find that risk mitigation through income diversification is not clearly benefiting credit health, however, community level economic variables are significant drivers of credit scores. The results across my thesis chapters provide unique insights for managers looking to target harvester well-being through risk mitigation.