Seafood prices reveal impacts of a major ecological disturbance.

Abstract

Coastal hypoxia (dissolved oxygen ≤ 2 mg/L) is a growing problem worldwide that threatens marine ecosystem services, but little is known about economic effects on fisheries. Here, we provide evidence that hypoxia causes economic impacts on a major fishery. Ecological studies of hypoxia and marine fauna suggest multiple mechanisms through which hypoxia can skew a population's size distribution toward smaller individuals. These mechanisms produce sharp predictions about changes in seafood markets. Hypoxia is hypothesized to decrease the quantity of large shrimp relative to small shrimp and increase the price of large shrimp relative to small shrimp. We test these hypotheses using time series of size-based prices. Naive quantity-based models using treatment/control comparisons in hypoxic and nonhypoxic areas produce null results, but we find strong evidence of the hypothesized effects in the relative prices: Hypoxia increases the relative price of large shrimp compared with small shrimp. The effects of fuel prices provide supporting evidence. Empirical models of fishing effort and bioeconomic simulations explain why quantifying effects of hypoxia on fisheries using quantity data has been inconclusive. Specifically, spatial-dynamic feedbacks across the natural system (the fish stock) and human system (the mobile fishing fleet) confound "treated" and "control" areas. Consequently, analyses of price data, which rely on a market counterfactual, are able to reveal effects of the ecological disturbance that are obscured in quantity data. Our results are an important step toward quantifying the economic value of reduced upstream nutrient loading in the Mississippi Basin and are broadly applicable to other coupled human-natural systems.

Department

Description

Provenance

Citation

Published Version (Please cite this version)

10.1073/pnas.1617948114

Publication Info

Smith, Martin D, Atle Oglend, A Justin Kirkpatrick, Frank Asche, Lori S Bennear, J Kevin Craig and James M Nance (2017). Seafood prices reveal impacts of a major ecological disturbance. Proc Natl Acad Sci U S A, 114(7). pp. 1512–1517. 10.1073/pnas.1617948114 Retrieved from https://hdl.handle.net/10161/16086.

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Scholars@Duke

Smith

Martin D. Smith

George M. Woodwell Distinguished Professor of Environmental Economics

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 identifying unintended consequences of marine and coastal policies that ignore human behavioral feedbacks. Smith’s methodological interests span micro-econometrics, optimal control theory, time series analysis, and numerical modeling of coupled human-natural systems. Smith’s published work appears in The American Economic Review, Nature, Science, Proceedings of the National Academy of Sciences, Journal of Environmental Economics and Management, the Review of Economics and Statistics, and a number of other scholarly journals that span environmental economics, fisheries science, marine policy, ecology, and the geo-sciences. Smith has received national and international awards, including the Quality of Research Discovery from the Agricultural and Applied Economics Association, Outstanding Article in Marine Resource Economics, and an Aldo Leopold Leadership Fellowship. His research has been funded by the National Science Foundation, the National Oceanic and Atmospheric Administration, the National Center for Ecological Analysis and Synthesis, and the Research Council of Norway. Smith has served as Editor-in-Chief of the journal Marine Resource Economics, Co-Editor of the Journal of the Association of Environmental and Resource Economists, and Co-Editor of the Journal of Environmental Economics and Management. He served as a member of the Scientific and Statistical Committee of the Mid-Atlantic Fishery Management Council and currently serves on the Ocean Studies Board of the National Academies.

Bennear

Lori Snyder Bennear

Professor of Environmental Economics and Policy

My research focuses on evaluating environmental policies and improving methods and techniques for conducting these evaluations. While the field of policy evaluation is a broad one, my specific niche is in bringing rigorous quantitative methods to evaluate environmental policy innovations along four dimensions.  (1) Evaluating the effectiveness of environmental policies and programs. This line of research uses statistical analysis to estimate the extent to which environmental policies such as information disclosure and management-based regulations actually improve corporate environmental performance, change household behavior, or improve individual environmental health indicators. (2) Evaluating strategic behavioral responses to non-traditional regulatory regimes. Environmental policies create incentives and in responding to these incentives, regulated entities sometimes behave strategically in ways that undermine program effectiveness.  This line of research seeks to illuminate these strategic behavioral responses and quantify the magnitude of their impact.  (3)  Assessing the distributional impacts of these new regulatory regimes. My research in this area evaluates whether innovations in regulatory policy result in uneven distribution of environmental impacts on lower income or minority communities.  (4)  Evaluating the role of program evaluation in environmental policy. My research identifies the barriers to and facilitators of increased use of evaluation in environmental policy.


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