Fisheries management when quotas are costly to change

Background/Question/Methods

Ecological systems are dynamic and policies to manage them need to respond to that variation.  However, policy adjustments will sometimes be costly, which means that fine-tuning a policy to track variability in the environment very tightly will only sometimes be worthwhile. We use a classic fisheries management question – how to manage a stochastically varying population using annually varying quotas in order to maximize profit - to examine how costs of policy adjustment change optimal
management recommendations. Costs of policy adjustment (here changes in fishing quotas through time) could take different forms. For example, these costs may respond to the size of the change being implemented or there could be a fixed cost any time a quota change is made.

Results/Conclusions

We show how different forms of policy costs have contrasting implications for optimal policies. While some types of cost act to smooth out variation in quotas and stock sizes, as one might have expected, others can actually increase variation in stock sizes and quotas through time. We also show that the potential economic impact on the fishery of managers assuming policy adjustment costs are present when in fact they are absent is much smaller than the impact of managers assuming such costs are absent if they are present.