Fish Stock Endogeneity in a Harvest Function: 'El Nino' Effects on the Chilean Jack Mackerel Fishery

Abstract

There are several examples of pelagic fisheries that have experienced fishing collapse when facing downward abundance cycles. Improving understanding about pelagic catch's stock dependence can help avoid new cases of fishing collapse. This paper analyses the possible endogeneity of the fish stock variable in a pelagic fishery harvest function. The harvest function is estimated using panel data and 'El Nino' episodes as instrumental variable for the Chilean jack mackerel biomass. This strategy produces consistent estimates of the fish biomass coefficient. The paper makes two contributions. First, it corrects for endogeneity of the fish stock variable, an issue often underestimated in empirical fishery economics. Secondly, it shows that 'El Nino' episodes have negative effects on the Chilean jack mackerel biomass.

Keywords: 'El Nino' Phenomenon, Endogenous Biomass in a Harvest Function, Instrumental Variable Estimation, Pelagic Fisheries

JEL Classification: Q22, C33, L79