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Renewable resource management with environmental prediction: the importance of structural specification
Author(s) -
Kennedy Chris J.,
Barbier Edward B.
Publication year - 2013
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/caje.12038
Subject(s) - stock (firearms) , economics , renewable resource , natural resource economics , resource (disambiguation) , econometrics , renewable energy , ecology , computer science , biology , engineering , mechanical engineering , computer network
Environmental variability can substantially influence renewable resource growth, and as the ability to forecast environmental conditions improves, opportunities for adaptive management emerge. Using a stochastic stock‐recruitment model, Costello, et al. show the optimal management response to a prediction of favourable growth conditions is to reduce current harvests. We find this result may be reversed when environmental variability and stock are substitutes in growth, a possibility that has been ignored by resource economists. As an example, we analyze the South Carolina white shrimp fishery, finding the optimal response to a prediction of favourable overwinter conditions is to increase fall harvests.