oyster economic analysis lipton DNR

Information about oyster economic analysis lipton DNR

Published on January 4, 2008

Author: Gavril

Source: authorstream.com

Content

A New Oyster for Chesapeake Bay?:  A New Oyster for Chesapeake Bay? An Economic Perspective To Support the Development of an EIS Doug Lipton Department of Agricultural & Resource Economics Maryland Sea Grant Extension Program Presentation Outline:  Presentation Outline Overview of Economic Considerations Benefits Costs Risks A Restored Oyster Market – Price and Production Other Benefit & Cost Information What are the economic benefits of a restored oyster resource in Chesapeake Bay?:  What are the economic benefits of a restored oyster resource in Chesapeake Bay? Direct Use Benefits :  Direct Use Benefits Commercial Fishermen Incomes Oyster Dealer/Processor Incomes Oyster Consumers Indirect Use Benefits :  Indirect Use Benefits Habitat improvement leading to increased populations of other commercial & recreational species (e.g. striped bass, blue crab) Water quality Increased populations of other commercial & recreational species Boating, swimming & beach use Increased value of waterfront property Potential cost savings in achieving mandated water quality standards Non or Passive Use Value:  Non or Passive Use Value Existence Value – Exclusive of the direct use of the oyster as a food resource or it’s indirect value in supporting other uses, what are citizen’s of the region willing-to-pay to have a restored oyster population in Chesapeake Bay? Benefits of C. virginica vs. C. ariakensis:  Benefits of C. virginica vs. C. ariakensis Will one species be more profitable than the other? Will consumers prefer one species over the other? Will one species create better habitat for other fish species than the other? Will one species be more effective in improving water quality than the other? Does the general public care whether the oyster in Chesapeake Bay is a non-native species? Will one species generate these benefits significantly more rapidly than the other? Costs and Risks of C. virginica vs C. ariakensis:  Costs and Risks of C. virginica vs C. ariakensis Will it be more costly to achieve the population goals with one species compared to the other? What risks are there in introducing a non-native species into the Chesapeake ecoystem: Introduce new diseases – diminished probability with ICES Protocol Be a vector for indigenous disease organisms – e.g., Bonamia sp. in North Carolina Destroy habitat Irreversibility Outcompeting native oyster Something else we can’t anticipate A Risk-Time Trade-off:  A Risk-Time Trade-off Risk Time Estimating Direct Use Benefits:  Estimating Direct Use Benefits U.S. Oyster Production by Region:  U.S. Oyster Production by Region Market Share of Production By Region:  Market Share of Production By Region Nominal & Real Oyster Prices:  Nominal & Real Oyster Prices What Will Happen to Oyster Prices if Chesapeake Bay Production Increases?:  What Will Happen to Oyster Prices if Chesapeake Bay Production Increases? Stated goal is to increase oyster populations to a level that will result in a sustainable harvest equal to the harvest from the 1920-1970 period. That’s 4.9 million bushels a year! Probably was not a sustainable harvest Overharvesting in early part of the period Relied on repletion program in latter part Is this harvest feasible? (Today’s Focus) A Note About the Impact of Hurricanes Katrina & Rita on Gulf Oysters and the Market:  A Note About the Impact of Hurricanes Katrina & Rita on Gulf Oysters and the Market Short-Run Impacts Water quality concerns? What is mortality from storms? Loss of fleet and displacement of fishermen? Long-Run Impacts Inverse Demand for Chesapeake Bay Oyster Production:  Inverse Demand for Chesapeake Bay Oyster Production Chesapeake Bay Oyster Price Is a Function Of: CB production Production in other regions A demand shift over time (1979) Concerns about Vibrio vulnificus in Gulf of Mexico oysters (1991) Estimate Inverse Demand:  Estimate Inverse Demand *Indicates significance at 90% confidence level. R2 = 0.79 Demand Analysis Results:  Demand Analysis Results If the Chesapeake Bay Oyster Fishery Produced 4.9 Million Bushels: prices would fall from: 1999-2003 Average of $27 per bushel to restored fishery price of $10.60 per bushel Price is Probably Unprofitable Use Industry Expert Survey of Price to Determine Industry Size Survey of Oyster Dealers:  Survey of Oyster Dealers Oyster Industry believes median projection of bushel price for a “restored” fishery is $18.80 for either species. Solving inverse demand estimate for this price: EIS Harvest Goal – 4.9 million bushels Predicted Actual Harvest – 2.57 million bushels What Would the Annual Benefits Be?:  What Would the Annual Benefits Be? Some Caveats:  Some Caveats The net values may be significantly lower than the gross values, and even zero. Depends on opportunity costs of time and investments. May be able to earn more money not fishing or processing oysters. Depends on management system. Property rights such as leased bottom more likely to yield positive benefits than a public fishery where watermen increase harvesting costs in order to catch the same oyster. What About Other Values?:  What About Other Values? Indirect Use Values – Recreational Fishing:  Indirect Use Values – Recreational Fishing Recreational Fishing Striped Bass Value (Lipton & Hicks, 2003) Total Value of Striped Bass Fishing in Chesapeake Bay - $77 million (A Risk Factor) Declines in DO from current levels costly $6.6 - $9.5 million per year Improvements from current levels are small $255 - $320 thousand per year Other species may benefit as well Indirect Use Values – Recreational Boaters:  Indirect Use Values – Recreational Boaters Maryland Boaters (Lipton, 2004) Boaters self-ranked water quality on a Likert scale (1-5) Annual benefit to moving up one unit in ranking $8.3 million Existence Value:  Existence Value In a random digit dial phone survey, 69% of respondents either didn’t know the status of oyster populations in the Bay or thought they were stable or increasing over the past 10 years! Mandated Nutrient Reduction:  Mandated Nutrient Reduction Chesapeake Bay Commission’s Cost Effective Measures Waste Treatment Upgrades - $8.56/lb N Enhanced Nutrient Management - $4.41/lb N Cover Crops - $3.13/lb N Nutrient Management - $1.66/lb N Conservation Tillage - $1.57/lb N Diet and Feed Changes - $?/lb N Gets to 80% of Nutrient Reduction Goal Getting to the remaining 20% is more expensive and a potential measure of cost savings due to oyster restoration if it is done instead. Concluding Comments:  Concluding Comments The dominant difference in the benefits between the two species will be the time frame in which they are realized. The dominant difference in the costs of the options is due to the unknown risks associated with C. ariakensis Even if we can quantify in economic terms what is at risk, what probability will we assign to these risks to determine an expected value? We can not do controlled experiments to determine a priori many of these probabilities. Decision making under large uncertainty calls for a precautionary approach. What is precautionary is in the eyes of the beholder. For the oyster industry, the risky thing is to do nothing. For others, the introduction is the risky approach.

Related presentations


Other presentations created by Gavril

Chapter6
01. 01. 2008
0 views

Chapter6

CVPR2007 tutorial bag of words
22. 11. 2007
0 views

CVPR2007 tutorial bag of words

satcommsspring2005
28. 11. 2007
0 views

satcommsspring2005

XML schema part1 EN
05. 12. 2007
0 views

XML schema part1 EN

25 5
26. 10. 2007
0 views

25 5

ROME PRESENTATION
29. 10. 2007
0 views

ROME PRESENTATION

ISPS Presentation
05. 11. 2007
0 views

ISPS Presentation

Positioning
20. 11. 2007
0 views

Positioning

Presentacion1 rebecca final
23. 11. 2007
0 views

Presentacion1 rebecca final

Meditation
17. 12. 2007
0 views

Meditation

ShipFF Satterfield
07. 11. 2007
0 views

ShipFF Satterfield

hipaa 101 revised ver3 20070627
25. 12. 2007
0 views

hipaa 101 revised ver3 20070627

NLTS2 briefing 06 14
27. 12. 2007
0 views

NLTS2 briefing 06 14

ABC4All JG
29. 12. 2007
0 views

ABC4All JG

WebCT 3 8CE Gradebook v1 0
13. 12. 2007
0 views

WebCT 3 8CE Gradebook v1 0

Parshall ppt
03. 12. 2007
0 views

Parshall ppt

AAIWeb Pred2
07. 01. 2008
0 views

AAIWeb Pred2

nyciboga forum
07. 01. 2008
0 views

nyciboga forum

egee den haag nov04
01. 11. 2007
0 views

egee den haag nov04

Part2am 2 BobTetrault
23. 11. 2007
0 views

Part2am 2 BobTetrault

MeierJet
01. 12. 2007
0 views

MeierJet

450 12 13
21. 11. 2007
0 views

450 12 13

voting2
29. 10. 2007
0 views

voting2

measuring mkt share
20. 02. 2008
0 views

measuring mkt share

18816487826712463302 80601076398
24. 02. 2008
0 views

18816487826712463302 80601076398

Calle Capstone Copyright
27. 02. 2008
0 views

Calle Capstone Copyright

PL Tay
04. 01. 2008
0 views

PL Tay

NCLBREAP 000
28. 11. 2007
0 views

NCLBREAP 000

Lyon Diet Heart Study
05. 03. 2008
0 views

Lyon Diet Heart Study

TourismMar607
14. 03. 2008
0 views

TourismMar607

2004 Media Trek Presentation
28. 09. 2007
0 views

2004 Media Trek Presentation

elettivo2007
04. 12. 2007
0 views

elettivo2007

05Carr
27. 03. 2008
0 views

05Carr

cdc tb intervention rev11 07
30. 03. 2008
0 views

cdc tb intervention rev11 07

Tikoo AntarcticIceSheet
03. 10. 2007
0 views

Tikoo AntarcticIceSheet

EYF
13. 04. 2008
0 views

EYF

noh
26. 11. 2007
0 views

noh

14 Feb 06 Byzantine
31. 10. 2007
0 views

14 Feb 06 Byzantine

dogscancer
16. 11. 2007
0 views

dogscancer

IDSS250805PP
24. 12. 2007
0 views

IDSS250805PP

IBCAST Present
07. 11. 2007
0 views

IBCAST Present

Amy Steph Andrea Juan
14. 12. 2007
0 views

Amy Steph Andrea Juan

Magistarski rad Knezevic
05. 01. 2008
0 views

Magistarski rad Knezevic

dallatorre Workshop RICH2004
14. 11. 2007
0 views

dallatorre Workshop RICH2004

mgct2 boylan
29. 11. 2007
0 views

mgct2 boylan

flare0049
06. 11. 2007
0 views

flare0049

CalDay2
28. 11. 2007
0 views

CalDay2

IV 4 1 Fujimoto Security
05. 11. 2007
0 views

IV 4 1 Fujimoto Security

021705astmtgpres
08. 11. 2007
0 views

021705astmtgpres

Great Lakes
28. 12. 2007
0 views

Great Lakes

BreierGrantwriting Mar2001
18. 12. 2007
0 views

BreierGrantwriting Mar2001

Briet
26. 10. 2007
0 views

Briet

FoodPsychology
11. 12. 2007
0 views

FoodPsychology