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Harvest Reporting, Timely Information, and Incentives for Technology Adoption
Author(s) -
Holzer Jorge
Publication year - 2017
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1093/ajae/aaw045
Subject(s) - incentive , business , investment (military) , order (exchange) , environmental economics , finance , economics , microeconomics , politics , political science , law
Natural resource managers typically adopt precautionary quota buffers to account for scientific and management uncertainty. Such buffers ensure compliance with harvest targets up to a confidence level set by the manager, but represent foregone profits and create incentives for firms’ voluntary investment in the provision of information that lessens the regulator's uncertainty. This paper characterizes conditions under which the fishing industry would willingly upgrade its reporting technology to provide accurate and timely catch data. Wireless technologies currently available to harvesters make the provision of real‐time information feasible and affordable. Industry's incentives critically depend on the manager's expected choice of effort restrictions under the alternative technologies. Upgrading is attractive if the new distribution of reporting error shifts probability mass away from large errors so that the quantile at the confidence level is reduced. First‐order stochastic dominance by the distribution under the baseline technology is a sufficient condition. Evidence from the Maryland Blue Crab Accountability Pilot Program, an industry‐led initiative that tested the feasibility of adopting e‐logbooks, illustrates the results. Real‐time availability of accurate catch information under electronic reporting would translate into in‐season adjustments of the manager's controls that could increase the industry's total harvest.