| By: |
Robert L. Hicks (Department of Economics, College of William and Mary);
Kurt Schnier (Department of Environmental and Natural Reseource Economics, University of Rhode Island) |
| Abstract: |
This paper examines the impact of dolphin-safe eco-labeling and how it
fundamentally altered the spatial distribution of fishing effort and
fishermen's willingness to pay to avoid dolphins. To do this, a dynamic
discrete choice econometric model is applied to the Eastern Tropical Pacific
tuna fishery. This econometric approach combines a dynamic programming
component with the static discrete site choice model. This estimator couples
the current period projected profits associated with fishing a specific site
with the value of all future location choices on the cruise, assuming choices
are made optimally. The key feature of this model is that it recovers
behavioral parameters and solves the dynamic programming problem recursively.
The dynamic site choice model reveals a markedly higher impact on producers as
compared to the commonly used static model following the labeling regime.
Further, in all but a few cases the common practice in dynamic choice models
of setting discount factors equal to one is rejected. |
| Keywords: |
location choice, dynamic random utility modeling, dolphin-safe eco-labeling |
| JEL: |
C35 Q20 Q58 |
| Date: |
2006–01–12 |
| URL: |
http://d.repec.org/n?u=RePEc:cwm:wpaper:25&r=res |