“Opportunity Costs” Shape Fishermen’s Response to Marine Reserves

February 21, 2010

Martin D. Smith, (919) 613-8028, marsmith@duke.edu, or Tim Lucas, (919) 613-8084, tdlucas@duke.edu

DURHAM, N.C. – Concern about dwindling fish stocks has prompted many scientists and conservationists to call for the creation of more no-take marine reserves in the world’s oceans. Many fisherman, however, fear the economic effects of losing access to these former fishing grounds.

A new analysis, published in the February 22 issue of the Proceedings of the National Academy of Sciences, suggests that policymakers hoping to allay these fears and build support for reserves need to understand and address the full impacts of reserves on fishermen – including opportunity costs, a major factor that is often overlooked. The opportunity cost of a decision is based on the value of what’s given up – the next-best alternative. Any choice with two or more options has an opportunity cost.   

“When a fisherman goes fishing, he purchases fuel, bait and other supplies, but he also forfeits the opportunity to earn income through other activities – this is his opportunity cost,” says Martin D. Smith, associate professor of environmental economics at Duke University’s Nicholas School of the Environment.

“It’s not enough to just look at lost fishing revenues in the potential reserve site,” he says, “you also have to look at potential revenues in surrounding waters, the cost of fishing in these areas, and other potential sources of income for fishermen.”

In their study, Smith and his colleagues used a bioeconomic model of a limited-entry fishery to explore how opportunity costs and related economic or biological factors might influence fishermen’s response to the proposed formation of a marine reserve.

They found that if the opportunity costs are high – that is, if there are good opportunities to earn income elsewhere – fishermen are less likely to oppose the creation of a reserve, especially if they perceive long-term benefits to its creation, such as future stock enhancement outside its boundaries. If opportunity costs are low, however, and long-term benefits are perceived as uncertain, opposition is likely to be high.

Locating the reserves in biologically important sources, or breeding grounds, increases the likelihood of spillover benefits, he says, and can be critical to mitigating long-term opposition.

Spillovers occur when a recovering stock from within the reserve spreads, or “spills over,” into surrounding waters, increasing harvestable fish stocks there. If reserves are sited where no spillover benefits occur, however, the costs to fishermen will grow over time, the model showed.

The model also showed that reserves’ locations can have a significant impact on the outcomes of programs providing dedicated access privileges, or “catch shares,” to fishermen. Catch shares guarantee each shareholder a fixed portion of the fishery’s total allowable catch, which is set annually by scientists. Much like stock shares, catch shares typically can be bought or sold. They can gain or lose value over time, depending on whether fish populations – and thus, annual allowable catches – increase or decrease.

“Our results suggest that catch share-holders may have less opposition to an appropriately sited reserve because it could increase asset values,” Smith says. “However, opposition could be stronger with catch shares if reserves are placed in independent systems – locations where no spillover benefits are produced. That would diminish the value of the shares.”

The model explored how fishermen’s responses to reserves can be affected by a variety of other factors as well, such as distance from port; fuel costs; price of fish; and level of fish stocks in the proposed reserve and other nearby waters.

Intangible social factors, such as a love of the fishing lifestyle, or perceived costs of a reserve on a fisherman’s family life, friendshjps or community were also examined.

“Advocates for marine reserves often treat fishermen’s assertions about the costs with the same skepticism that fishermen have for the stated benefits,” Smith says. “Our model shows that identifying all the costs and benefits is essential if policymakers want to build consensus and make sound decisions about where – what fishery and what area within the fishing grounds – to site a marine reserve.

“This is especially relevant,” he says, “when policies are set through public stakeholder meetings that may be dominated by extreme rather than moderate representatives from all sides.”

Smith’s co-authors on the paper are John Lynham of the University of Hawaii at Manoa; James N. Sanchirico of the University of California at Davis and Resources for the Future; and James A. Wilson of the University of Maine at Orono.