A Note on the “Stock Effect”

The stock effect implies that unit operating costs will be sensitive to the size of the exploited fish stock(s). This is investigated, using data for Norwegian trawlers. The results indicate that there is a significant stock effect for the two most important stocks exploited by these fisheries, haddock and cod jointly, and saithe. Two cost function specifications are used, one using catch shares as weights and another using a Taylor approximation to the cost function. While both agree on the existence of the stock effect, the numerical estimates of its strength differ.