The value of El Niño forecasts in the management of salmon: A stochastic dynamic assessment

Christopher J. Costello; Richard M. Adams; Stephen Polasky

doi:10.2307/1244062

The value of El Niño forecasts in the management of salmon: A stochastic dynamic assessment

Christopher J. Costello, Richard M. Adams, Stephen Polasky

Applied Economics

Research output: Contribution to journal › Article › peer-review

69 Scopus citations

Abstract

The El Niño-Southern Oscillation (ENSO) is the largest source of interannual variability in global climate. Variability in climate has been linked to variability in fisheries, specifically salmon stocks of the Pacific Northwest. The ability to forecast El Niño events already exists and is likely to improve in coming years. An accurate prediction may have value because it allows for better management decisions. In this article, we develop a bioeconomic model of the coho salmon fishery and derive the value of information from improved El Niño forecasting ability. We find that a perfect El Niño forecast results in an annual welfare gain of approximately $1 million, while imperfect forecasts lead to smaller gains. Results also suggest that optimal management in the face of uncertainty involves a "conservative" management strategy, resulting in lower harvest, higher wild fish escapement, and lower hatchery releases than management in the absence of such uncertainty.

Original language	English (US)
Pages (from-to)	765-777
Number of pages	13
Journal	American Journal of Agricultural Economics
Volume	80
Issue number	4
DOIs	https://doi.org/10.2307/1244062
State	Published - Nov 1998

Bibliographical note

Funding Information:
Christopher J. Costello is a graduate student in the Department of Agricultural and Resource Economics at the University of California, Berkeley. Richard M Adams is professor and Stephen Polasky is associate professor in the Department of Agricultural and Resource Economics at Oregon State University. The authors gratefully acknowledge David Sampson of the Department of Fish and Wildlife at Oregon State University for assistance in model development, Andrew Solow of the Woods Hole Oceanographic Institution for suggestions on experimental design and statistical analysis, and Caitlin Simpson of the Office of Global Programs, NOAA, for assistance in project design. Partial funding for this research was provided by the Office of Global Programs, National Oceanic and Atmospheric Administration through grant NA56GP0322 to Oregon State University. Technical paper 11276 of the Oregon Agricultural Experiment Station.

Keywords

Coho salmon
Economic analysis
El Niño
Value of information

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title = "The value of El Ni{\~n}o forecasts in the management of salmon: A stochastic dynamic assessment",

abstract = "The El Ni{\~n}o-Southern Oscillation (ENSO) is the largest source of interannual variability in global climate. Variability in climate has been linked to variability in fisheries, specifically salmon stocks of the Pacific Northwest. The ability to forecast El Ni{\~n}o events already exists and is likely to improve in coming years. An accurate prediction may have value because it allows for better management decisions. In this article, we develop a bioeconomic model of the coho salmon fishery and derive the value of information from improved El Ni{\~n}o forecasting ability. We find that a perfect El Ni{\~n}o forecast results in an annual welfare gain of approximately $1 million, while imperfect forecasts lead to smaller gains. Results also suggest that optimal management in the face of uncertainty involves a {"}conservative{"} management strategy, resulting in lower harvest, higher wild fish escapement, and lower hatchery releases than management in the absence of such uncertainty.",

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note = "Funding Information: Christopher J. Costello is a graduate student in the Department of Agricultural and Resource Economics at the University of California, Berkeley. Richard M Adams is professor and Stephen Polasky is associate professor in the Department of Agricultural and Resource Economics at Oregon State University. The authors gratefully acknowledge David Sampson of the Department of Fish and Wildlife at Oregon State University for assistance in model development, Andrew Solow of the Woods Hole Oceanographic Institution for suggestions on experimental design and statistical analysis, and Caitlin Simpson of the Office of Global Programs, NOAA, for assistance in project design. Partial funding for this research was provided by the Office of Global Programs, National Oceanic and Atmospheric Administration through grant NA56GP0322 to Oregon State University. Technical paper 11276 of the Oregon Agricultural Experiment Station.",

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N2 - The El Niño-Southern Oscillation (ENSO) is the largest source of interannual variability in global climate. Variability in climate has been linked to variability in fisheries, specifically salmon stocks of the Pacific Northwest. The ability to forecast El Niño events already exists and is likely to improve in coming years. An accurate prediction may have value because it allows for better management decisions. In this article, we develop a bioeconomic model of the coho salmon fishery and derive the value of information from improved El Niño forecasting ability. We find that a perfect El Niño forecast results in an annual welfare gain of approximately $1 million, while imperfect forecasts lead to smaller gains. Results also suggest that optimal management in the face of uncertainty involves a "conservative" management strategy, resulting in lower harvest, higher wild fish escapement, and lower hatchery releases than management in the absence of such uncertainty.

AB - The El Niño-Southern Oscillation (ENSO) is the largest source of interannual variability in global climate. Variability in climate has been linked to variability in fisheries, specifically salmon stocks of the Pacific Northwest. The ability to forecast El Niño events already exists and is likely to improve in coming years. An accurate prediction may have value because it allows for better management decisions. In this article, we develop a bioeconomic model of the coho salmon fishery and derive the value of information from improved El Niño forecasting ability. We find that a perfect El Niño forecast results in an annual welfare gain of approximately $1 million, while imperfect forecasts lead to smaller gains. Results also suggest that optimal management in the face of uncertainty involves a "conservative" management strategy, resulting in lower harvest, higher wild fish escapement, and lower hatchery releases than management in the absence of such uncertainty.

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The value of El Niño forecasts in the management of salmon: A stochastic dynamic assessment

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