Production relationships for the Oregon commercial fishing fleet

• Main Author: Richardson, James Andrew
• Other Authors: Smith, Frederick J.
• Language: en_US
• Published: 2011
• Subjects: Fisheries > Economic aspects > Oregon
• Online Access: http://hdl.handle.net/1957/26002

Fishing firms in Oregon operate in a complex and dynamic physical, biological and institutional environment. Within this environment, managers of these firms will attempt to maximize some objective function which may include profit. This maximization is dependent upon the level of output, or the levels of inputs. Given a relationship between output and inputs, production economics theory tells us how to combine inputs so that an optimum level of output is achieved. This study applies production economics theory to commercial fishing firms in Oregon. The primary objective of this research was to determine whether a relationship between output and production inputs could be estimated statistically and provide the marginal value product information to determine the optimum combination of inputs. A second objective was to determine whether a statistical relationship could be estimated which would predict fuel use in terms of physical boat characteristics for the fishing firms in Oregon. Cross-section data were obtained for analysis from a mail survey of the population of 4,462 commercial fishing firms. Response to the survey was excellent, with 45 percent of the surveys returned. The data were used to estimate production relationships among the fishing firms using gross revenue as a dependent variable and independent variables measuring boat length, engine horsepower, hold capacity, fuel consumed fishing in 1979, mandays of labor used, years fishing experience of the skipper, capital investment in electronic gear and capital investment in deck gear. Two functional forms for regression were used; log-linear and linear. It was expected that the log-linear form of the model would provide the best estimate based on its convenient mathematical characteristics and wide use in empirical research applications. It turned out, however, that the better estimate was obtained with the linear form of the model. This estimate was interpreted as a linear approximation to a segment of the production function and was used to calculate estimates of the marginal value products for the production inputs. To investigate whether a better estimate of the production relationship could be obtained by disaggregating the sample, two disaggregations were tried. The sample was disaggregated into groups of firms having similar characteristics of species fished and also boat length groupings. The results obtained from these estimations were statistically inferior to the estimated relationship using the full sample. The conclusion was made that the production relationships were better estimated across all firms in the sample rather than by disaggregation. The estimation of fuel use by boat characteristics was reasonably successful. Again, a linear model was chosen as the best statistical relationship. The model estimated fuel use by boat length, engine horsepower and mandays of labor. A prediction of the fuel used by all fishing firms was made using data on the population of fishing firms from the 1979 Oregon Department of Fish and Wildlife license file. The predictive equation used only two variables, boat length and horsepower as these are the only characteristics presently available for the population of firms. === Graduation date: 1981