The economic payoffs from marine reserves: Resource rents in a stochastic environment

R. Quentin Grafton, Tom Kompas*, Pham Van Ha

*Corresponding author for this work

    Research output: Contribution to journalArticlepeer-review

    28 Citations (Scopus)

    Abstract

    In this paper we analysed the economic payoffs from marine reserves using a stochastic optimal control model, with a jump-diffusion process. The results show that even if the reserve and harvested populations face the same negative shocks, harvesting is optimal, the population is persistent and there is no uncertainty over current stock size, a reserve can increase resource rents. Using fishery data we demonstrate that the payoffs from a reserve, and also optimum reserve size, increase the larger is the magnitude of the negative shock, the greater its frequency and the larger its relative impact on the harvested population.

    Original languageEnglish
    Pages (from-to)469-480
    Number of pages12
    JournalEconomic Record
    Volume82
    Issue number259
    DOIs
    Publication statusPublished - Dec 2006

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