|Abstract or Summary
- Fishing firms in Oregon operate in a complex and dynamic physical,
biological and institutional environment. Within this environment, managers
of these firms will attempt to maximize some objective function
which may include profit. This maximization is dependent upon the level
of output, or the levels of inputs. Given a relationship between output
and inputs, production economics theory tells us how to combine inputs
so that an optimum level of output is achieved. This study applies production
economics theory to commercial fishing firms in Oregon.
The primary objective of this research was to determine whether a
relationship between output and production inputs could be estimated
statistically and provide the marginal value product information to determine
the optimum combination of inputs. A second objective was to determine
whether a statistical relationship could be estimated which would
predict fuel use in terms of physical boat characteristics for the
fishing firms in Oregon.
Cross-section data were obtained for analysis from a mail survey of
the population of 4,462 commercial fishing firms. Response to the survey
was excellent, with 45 percent of the surveys returned. The data were
used to estimate production relationships among the fishing firms using
gross revenue as a dependent variable and independent variables measuring
boat length, engine horsepower, hold capacity, fuel consumed fishing in
1979, mandays of labor used, years fishing experience of the skipper,
capital investment in electronic gear and capital investment in deck
Two functional forms for regression were used; log-linear and linear.
It was expected that the log-linear form of the model would provide the
best estimate based on its convenient mathematical characteristics and
wide use in empirical research applications. It turned out, however, that
the better estimate was obtained with the linear form of the model. This
estimate was interpreted as a linear approximation to a segment of the
production function and was used to calculate estimates of the marginal
value products for the production inputs.
To investigate whether a better estimate of the production relationship
could be obtained by disaggregating the sample, two disaggregations
were tried. The sample was disaggregated into groups of firms having
similar characteristics of species fished and also boat length groupings.
The results obtained from these estimations were statistically inferior
to the estimated relationship using the full sample. The conclusion was
made that the production relationships were better estimated across all
firms in the sample rather than by disaggregation.
The estimation of fuel use by boat characteristics was reasonably
successful. Again, a linear model was chosen as the best statistical
relationship. The model estimated fuel use by boat length, engine horsepower
and mandays of labor. A prediction of the fuel used by all fishing
firms was made using data on the population of fishing firms from the 1979
Oregon Department of Fish and Wildlife license file. The predictive equation
used only two variables, boat length and horsepower as these are the
only characteristics presently available for the population of firms.