Estimating Net Benefits of Reallocation: Discrete Choice Models of Sport and Commercial Fishing

Abstract

Increasing conflicts over allocation have heightened interest among fishery managers in reliable and comparable measures of the relative economic contribution of commercial and sport fisheries. This paper shows how discrete choice methods may be applied to develop comparable estimates of net economic benefits of a proposal to reallocate sockeye salmon from the commercial to the sport fishery in Alaska's Kenai River. The study estimates net benefits that include both market and nonmarket use values for three groups of fishers: sport anglers, commercial drift and setnet operators, and their crew members. Results for a midrange scenario for run size and price suggest that the commercial losses roughly offset sport gains. However, the particulars of this fishery are key to this result. The principal advantages of the discrete choice method are the flexibility of a micro decision model and comparable treatment of time and intangibles across different user groups. The principal disadvantages are increased data requirements and the difficulty of estimating confidence intervals.