As part of their strategy to meet total maximum daily load restrictions in the Chesapeake Bay, managers have developed nutrient trading markets to curb nitrogen and phosphorus flows into the estuarine system. Historically, nutrient trading programs have been restricted to credits between point sources or for agricultural mitigation technologies, such as the planting of cover crops. However, the denitrification and nutrient sequestration associated with oyster reefs has recently been a topic of much biological research. We investigate the role that nutrient credits for ecosystem services provided by restored oyster reefs can play in optimally managing oyster reef complexes by developing a coupled bioeconomic model of oyster reef growth and harvest. Our findings suggest that, along with harvest, the regulating services of denitrification and nutrient sequestration lead to positive net benefits in a majority of scenarios analyzed, although local environmental conditions play a prominent role in the ultimate outcomes.

JEL Codes: Q22, Q57, Q53.

Submerged aquatic vegetation (SAV) in the Chesapeake Bay is well below half of its historic levels, largely due to excessive nutrient and sediment loads degrading water quality. SAV provides important ecosystem functions, many of which are beneficial to local residents. To understand the implicit value residents place on SAV and the ecosystem services it provides, we undertake a hedonic property value study using residential transactions in 11 Maryland counties adjacent to the Chesapeake Bay. These data are matched to highresolution maps of SAV coverage. We pose a quasi-experimental comparison and examine how the prices of homes near the waterfront vary with the presence of SAV. On average, waterfront and near-waterfront homes within 200 meters of the shore sell at about a 6.5% premium when SAV is present. Applying these estimates to the 185,000-acre SAV attainment goal suggests total property value gains on the order of $436 million.

JEL Codes: Q51, Q53.

The Puget Sound estuary provides one of the most valuable shellfish habitats in the Pacific Northwest, USA. Shellfish are important economically, ecologically, and socially to the Puget Sound basin. The State of Washington manages the safety of shellfish harvest areas by assessing water quality on an ongoing basis and instituting advisories and closures based on water quality thresholds. Managers currently have little information to understand the effect of these closures on harvesting effort or economic values. In order to address this important need, we recently conducted a contingent behavior survey of recreational shellfish harvesters that use Puget Sound beaches. The survey elicited the number of annual trips respondents would expect to take under alternative closure scenarios, including a baseline of no closure. We estimate the demand for recreational trips using a count model system, quantifying the economic value lost to harvesters when beaches are closed due to pollution or biotoxins.

JEL Codes: Q53, Q26.

We investigated consumer preferences for wild and farmed fish in an experiment with 276 participants in France. The experiment consisted of three rounds—each round included a survey, sensory trials, and bidding. The survey results indicate consumers (1) perceive wild fish best for safety and health and farmed fish best for environmental sustainability and fish welfare; (2) rank salmon the highest on many attributes; and (3) prefer wild fish originating from the North Atlantic to farmed fish from France and northern Europe, and they rank farmed fish originating from developing countries lowest. In the sensory trials, salmon received the highest hedonic scores, followed by monkfish and cod, while pangasius scored significantly lower. Willingness to pay for salmon was almost as high as for monkfish and higher than for cod, while WTP for pangasius was substantially lower.

JEL Codes: C91, D12, Q22.

Tradable harvest rights are gradually replacing prescriptive regulations in the management of commercial fisheries. We provide evidence that this management strategy can also successfully achieve non-commercial marine conservation goals, such as limiting unintended catch (bycatch) of protected species. We examine fishers' responses to the introduction of tradable harvest rights for protected species, ‘bycatch rights,’ in the US West Coast groundfish fishery, finding evidence of adjustment along several margins and estimating the marginal cost of conservation. Fishers adapted to bycatch rights by changing fishing location, gear, time of day fished, and duration of fishing activity. As a result, catches of protected species fell dramatically. The nuanced nature of fishers’ responses indicates that the least-cost way of achieving conservation goals can involve fine-tuned behavioral adaptations that would be difficult or impossible to achieve with command-and-control regulation.

JEL Codes: K2, Q22, D23.

Prices of fish quotas in Norway are not reported specifically, but can be estimated from the cost and earnings studies of the Directorate of Fisheries. Two methods of estimation are used: (1) increase in book value of fishing rights, and (2) annual amortization of quotas multiplied by their time of validity. It is found that the price of quotas, in most cases, exceeds the profit rate in the fishery and is often higher than the contribution margin. Hence quota prices in most cases exceed the resource rent and are more consistent with a willingness to pay for additional quotas bought to improve the utilization of existing equipment, in which case fixed costs are irrelevant. The puzzle of quota prices in many cases exceeding the contribution margin can be resolved by assuming that boat owners expect to keep a substantial portion of their purchased quotas through redistribution and use a low discount rate when evaluating quotas.

JEL Codes: Q22, Q28.