The Day-to-day Supply Responses of a Limited-entry Mixed Fishery

Abstract

Small-scale fishers’ short-run supply decisions are understudied, often because of data limitations. We utilize a unique dataset of daily catches and prices from a mixed-species trawl fishery in Taiwan, characterized by targeting decisions made before prices are formed. To investigate the effect of expected prices on fishers’ supply decisions, we formulate a vector error correction model in a seemingly unrelated regression system of 11 fish species. We find the price-elastic short-run supply for several species: the maximum daily price elasticity of supply (PES) ranges from 0.4–1.1 and is statistically significant for all but one species. The long-run PES (approx. weekly) is > 1 for eight species. In contrast, elasticity with respect to wave height is weak (the median short-run elasticity −0.4). These findings are unexpected for trawl fisheries believed to have low selectivity. Our results highlight the potential that auction markets have to incentivize fishing that emphasizes quality over quantity.