We analyze the Gulf of Mexico brown shrimp fishery and the potential impacts of a large seasonal area of hypoxia (low dissolved oxygen) that coincides with the peak shrimp season. A spatial-dynamic bioeconomic simulation embeds three biological impacts on shrimp: mortality, growth, and aggregation on hypoxic edges. Hypoxia creates feedbacks in the bioeconomic system, altering catch and effort patterns. System changes propagate over space to affect areas that do not experience hypoxia. Areas that might otherwise be considered controls in a natural experiments framework are contaminated by the ecological disturbance through spatial sorting. Aggregate predictions from simulations are similar to empirical fishery data. Average shrimp size and total landings are negatively correlated, as are hypoxic severity and landings. Shrimp size and hypoxic severity are only weakly negatively correlated. Growth overfishing, which varies with recruitment success and ecological disturbances, is a key mediating effect.

JEL Code: Q22