Generating Enhanced Fishery Rents by Internalizing Product Quality Characteristics

This paper demonstrates howadditional rents are generated in a fisherycharacterized by intraseasonal variation infish characteristics, including size,condition, and composition. Based on anexpanded conceptual model of the optimalharvest rule, fish characteristics affect preand post harvest production yields and outputprices. A dynamic empirical model, which uses asystem of quality characteristics and anhedonic equation, illustrates the complexrelationships and management choices associatedwith internalizing seafood qualitycharacteristics in a hake fishery. The modelretains the regulated open access managementsystem, but controls intertemporal andintersectoral quotas, production portfolios,and total allowable catch. Results demonstratethat including revenue-side effects frominternalizing fish quality can generatesignificantly greater rents and reduce therelative benefits of increased productionyields. If excluded, bioeconomic models canunderestimate the level of regulatory rentdissipation and overemphasize managementobjectives such as full utilization, whichcould misdirect processing decisions and resultin a suboptimal resource management plan.Implications for data collection,multidisciplinary analysis, and improvements inmarine resource management are discussed.