Market based supply of North Sea Herring and Icelandic Cod

A continuous-time bioeconomic model is developed and used to derive open-access and optimal management supply curves. Long-run equilibrium supply curves are estimated based on data for two fisheries: North Sea herring and Icelandic cod. The two species in question have very different biological characteristics. While the North Sea herring is a pelagic species found in schools in the sea, the Icelandic cod is a demersal species. Consequently, the methods used to harvest the two stocks are quite different. Based on the particularities of the fisheries in question, different production/cost functions have been used in the bioeconomic models. Different regulatory regimes in the fishery over the past two decades, both actual and theoretical, are evaluated with respect to effects on supply and stock levels. The results indicate that different regulations, as well as the biological characteristics of the species, can have a substantial impact on the supply of fish.