Three essays in applied economics : technical efficiency analysis and fisheries management

Abstract

This thesis consists of five chapters and presents three essays: one on technical efficiency analysis and two on fisheries management. Chapter 1 introduces the thesis and describes software packages and computation facilities used. In chapter 2, we discuss the new approach and techniques of Kalirajan and Obwona that use a stochastic varying coefficients production model to measure technical efficiency. Beside the advantages of the approach, we show that the estimation and frontier output formulation techniques of Kalirajan and Obwona have a significant limitation due to a strict assumption that is necessary for their techniques but not appropriate in production models. Thus, to improve their techniques, we propose a relaxation of that assumption as well as a new estimation procedure and a new frontier output formula that can be used under the assumption relaxation. After that, a case study on Vietnamese rice production is presented, in which the improvements we propose are used and illustrated to be practical and easy to apply. Chapter 3 and chapter 4 study a new tool for fisheries management called marine protected areas. In chapter 3, we propose the new concept of a marine protected area, which is an area where harvest is allowed but controlled at a fixed fraction of its fish stock. From that, a new fisheries management strategy is proposed: harvesting with the presence of a marine protected area. A deterministic dynamic optimal harvest problem is specified for the new strategy and solved in numerical simulation using the parameters of the Pacific halibut fishery to have optimal design (size and harvest fraction) of the marine protected area as well as the respective optimal harvest trajectory in the non-protected area. Results show that the new harvest strategy with a marine protected area can, in general, produce higher economic profit to fishers than the two common harvest strategies in previous studies that are harvesting with or without a marine reserve, while still, to a certain extent, protect fish stock against over-exploitation. In chapter 4, the harvest problem addressed in chapter 3 is extended to examine two separate cases that consider the presence of stochastic shocks on fish stocks and the possibility of switching the location of the marine protected area over time. Results of the former still support the advantages of using a marine protected area in pursuing high economic payoffs to fishers and show the sensitivity of optimal design of the marine protected area to changes in affecting sizes and arrival rates of stochastic shocks. Results of the latter demonstrate that flexibly switching the location of the marine protected area over time, instead of fixing its location, is a promising way to further increase the economic payoffs from a fish stock. Finally, chapter 5 summarizes the key contribution of the thesis and suggests some directions for further research.