Measuring welfare losses from hypoxia: The case of North Carolina brown shrimp
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While environmental stressors such as hypoxia (low dissolved oxygen) are perceived as a threat to the productivity of coastal ecosystems, policy makers have little information about the economic consequences for fisheries. Recent work on hypoxia develops a bioeconomic model to harness microdata and quantify the effects of hypoxia on North Carolina's brown shrimp fishery. This work finds that hypoxia is responsible for a 12.9% decrease in NC brown shrimp catches from 1999-2005 in the Neuse River Estuary and Pamlico Sound, assuming that vessels do not react to changes in abundance. The current article extends this work to explore the full economic consequences of hypoxia on the supply and demand for brown shrimp. Demand analysis reveals that the NC shrimp industry is too small to influence prices, which are driven entirely by imports and other domestic U.S. harvest. Thus, demand is flat and there are no measurable benefits to shrimp consumers from reduced hypoxia. On the supply side, we find that the shrimp fleet responds to variation in price, abundance, and weather. Hence, the supply curve has some elasticity. Producer benefits of reduced hypoxia are less than a quarter of the computed gains from assuming no behavioral adjustment. Copyright © 2012 MRE Foundation, Inc.
Published Version (Please cite this version)10.5950/0738-1360-27.1.3
Publication InfoCraig, JK; Huang, L; Nichols, LAB; & Smith, Martin D (2012). Measuring welfare losses from hypoxia: The case of North Carolina brown shrimp. Marine Resource Economics, 27(1). pp. 3-23. 10.5950/0738-1360-27.1.3. Retrieved from http://hdl.handle.net/10161/13600.
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Professor of Environmental Economics in the
Smith studies the economics of the oceans, including fisheries, marine ecosystems, seafood markets, and coastal climate adaptation. He has written on a range of policy-relevant topics, including economics of marine reserves, seasonal closures in fisheries, ecosystem-based management, catch shares, nutrient pollution, aquaculture, genetically modified foods, the global seafood trade, organic agriculture, coastal property markets, and coastal responses to climate change. He is best known for id