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Rögnvaldur Hannesson Kjell Salvanes Dale Squires

Technological change and the Tragedy of the Commons: The Lofoten Fishery over Hundred and Thirty Years. Rögnvaldur Hannesson Kjell Salvanes Dale Squires. Period covered: 1860-1988 (open access ended in 1988) Fish stock data since 1900. The traditional product: fish dried in open air.

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Rögnvaldur Hannesson Kjell Salvanes Dale Squires

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  1. Technological change and the Tragedy of the Commons: The Lofoten Fishery over Hundred and Thirty Years Rögnvaldur Hannesson Kjell Salvanes Dale Squires

  2. Period covered: 1860-1988 (open access ended in 1988) Fish stock data since 1900

  3. The traditional product: fish dried in open air

  4. Main issues • Productivity development 1860-1988 (last year of open access) • Puzzle: Labor productivity lagged behind agriculture & industry • Role of fish stock for productvity • Growth in TFP > growth in labor (or capital) productivity if role of stock taken into account • Open access dissipates gains from technical progess

  5. Labor productivity (value) in the Lofoten fishery (9-years moving average) versus wages in agriculture and manufacturing

  6. Labor productivity (annual and 9-years moving average) in the Lofoten fishery

  7. Strong correlation stock-catch Also between boats and men—we can’t use both in a regression, with boats as proxies for capital

  8. Fishermen per boat

  9. Production function: Fish migrations Y catch per year, E effort (boats or fishermen), S stock An instantaneous function not really appropriate for discrete time modeling, but the Lofoten fishery is seasonal (~3 months) with the fish migrating gradually to the area

  10. Note 0 < b < 1, constant reflects technical progress

  11. Change in participation (no. boats) related to catch per fisherman lagged one year Use no. fishermen & catch per fisherman, both lagged one year, as instrumental variables Using catch value per fisherman gives poorer results than just catch per fisherman Could be because price depends on quantity

  12. In 1938 fishermen got exclusive rights to sell raw fish. Seems to have stabilized prices (as intended).

  13. Somewhat uneven technological progress, if even, we’d see d00 < d10 <…< d70 < 0 completed by the 1970s Note 0 < b < 1, 0 < a ~ 1

  14. Growth rate of TFP: Estimates of a1 and a2 with panel data Set a1 = 0.65, a2 = 0.35

  15. Average G based on 9-years moving average of TFP TFP growth > labor productivity growth Normal technological progress, diluted by decline in stock

  16. Two possible reasons why TFP grows faster than LP: • Rising no fishermen per boat • Decline in fish stock

  17. Major episodes: Raw fish marketing board 1938 Motorization 1905-20 Better technology & outside options after 1950 Low prices 1920s & 30s, technology reversion

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