Measuring the Productive Efficiency of the Connecticut Long Island Lobster Sound Fishery Using a Novel Finite Mixture Model

Abstract

When vessel-level data and input prices are unobserved, estimating the effect of water quality changes on fishery performance can be challenging. To address this problem, we develop a novel production function model with technical efficiency (TE) under the assumption that there are multiple groups within the fishery with different levels of TE and the allocation of fishers into these groups is unknown. The methodology is applied to the Connecticut Long Island Sound lobster fishery. Two groups of fishers were identified to operate at different TE levels (0.88 and 0.74) between 1998 and 2007. The difference in TE is primarily explained by total fishing days and the number of fishers, though environmental variables also have some impact. These findings have important implications for policies geared toward improving efficiency in fisheries and accurate assessment of the overall health of marine fisheries.