Comparing Economic and Physical Measures of Capacity Utilization in Fisheries

Abstract

Measurement of fishing vessel capacity and capacity utilization has garnered substantial interest among economists for many years. Most applied studies adopted an output-oriented capacity definition and used data envelopment analysis to estimate capacity. However, other types of capacity models have also been used to estimate fishing capacity. Examples include the non-convex free disposal hull model, the probabilistic order-M model, and the maximal revenue model. This study compares capacity utilization estimates for a group of 125 vessels using six different capacity models and compares differences in capacity utilization and days needed to fish at capacity. Findings show significant differences in both capacity utilization estimates and days needed to achieve maximum capacity. With multiple models available for generating capacity estimates, analysts should be careful to select appropriate models when estimating fishery-level capacity or determining the presence and/or conditions of over- or undercapacity.