RT Journal Article
SR Electronic
T1 Cod Today and None Tomorrow: The Economic Value of a Marine Reserve
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 454
OP 469
DO 10.3368/le.85.3.454
VO 85
IS 3
A1 Grafton, R. Quentin
A1 Kompas, Tom
A1 Van Ha, Pham
YR 2009
UL http://le.uwpress.org/content/85/3/454.abstract
AB Using data from what was once one of the world’s largest capture fisheries, the northern cod fishery, the economic value of a marine reserve is calculated using a stochastic optimal control model with a jump-diffusion process. Counterfactual analysis shows that with a stochastic environment an optimal-sized marine reserve in this fishery would have prevented the fishery’s collapse and generated a triple payoff: raising resource rents even if harvesting was “optimal”; decreasing recovery time for the biomass to return to its former state, smoothing fishers’ harvests and resource rents; and lowering the chance of a catastrophic collapse following a negative shock. (JEL Q22, Q57)