Choice of remuneration regime in fisheries: the case of Hawaii’s longline fisheries

Nguyen, Quang and Leung, PingSun (2009) Choice of remuneration regime in fisheries: the case of Hawaii’s longline fisheries. Journal of Agricultural and Resource Economics, 34 (3). pp. 498-517. ISSN 1068-5502

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Abstract

One of the most prominent features of remuneration in the Hawaii’s longline fisheries industry has been the norm of share contract regimes. This paper investigates whether the use of share contract regime is positively correlated to increased economic returns. The principal-agent framework is applied to develop a theoretical model for the remuneration choice. Empirical estimation is conducted using a switching regression model that accounts for certain vessel characteristics effects on revenue, depending on remuneration regime used (i.e., share contract or flat wage), as well as the potential selection bias in the vessels’ contractual choice. Key findings from counterfactual simulations indicate: (1) a negative selection into choosing share contracts, and (2) that flat wage vessels would experience significantly higher revenues if they switch to share contracts. Thus, even though the labor market in Hawaii’s longline fisheries relies upon foreign crew members, the results suggest that it would benefit owners of flat wage vessels to apply share contracts to increase their revenues.

Item Type: Article
Research Areas: A. > Business School > Economics
A. > Business School > International Management and Innovation
Item ID: 16039
Notes on copyright: Original publication in Journal of Agricultural and Resource Economics 34(3):498–517 Copyright 2009 Western Agricultural Economics Association. Reproduced in this repository (eprints.mdx.ac.uk/) as permitted journal's copyright terms.
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Depositing User: Quang Nguyen
Date Deposited: 15 May 2015 13:00
Last Modified: 03 Apr 2019 17:15
URI: https://eprints.mdx.ac.uk/id/eprint/16039

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