Dynamic modelling of socio-economic benefits of resource allocation between commercial and recreational use

Project number: 2003-039

Project Status:

Completed

Budget expenditure: $154,200.00

Principal Investigator: John Nicholls

Organisation: Data Analysis Australia (DAA)

Project start/end date: 29 Jun 2003 - 8 Sep 2006

Contact:

FRDC

Need

Fisheries management (and stakeholders) at both State and national level do not have a well defined and documented framework and tested tool that is capable of modeling the way that changes in key variables impact on commercial and recreational relative use values over time and how this in turn affects socially optimum allocations through time. As a consequence,fisheries management is not well placed to be confident that decisions taken today are consistent with long term socially optimal outcomes.

In looking for a framework and set of tools to evaluate resource allocation options and to measure socially optimal allocations for the purposes of satisfying legislative, including ESD, objectives, decision makers have expressed a need for:
(1) a more general dynamic framework to look at optimal resource allocation through time .
(2) a socio-economic analytical framework with a consistent methodology and additional set of tested tools that explicitly take into account variables impacting on the optimization of socio-economic benefits from commercial and recreational uses through time;
(3) practical guidance in the application of the dynamic framework and advanced methodologies to address inter-sectoral related resource-sharing issues over time; and
(4) additional supporting methodologies and tools for WA Fisheries Department (and other fisheries Agencies throughout Australia) to use in the development of an integrated coastal fisheries management initiative that will provide a consistent framework for socio-economic analysis in addressing inter-sectoral resource allocation options over time.

Objectives

1. The development of a general framework that provides a theoretical basis for identifying key variables that impact on commercial and recreational use values over time

2. The documentation of a robust dynamic model capturing the significant variables that impact on these values over time and how these impact on socially optimum resource allocation through time and which allow simulations of the optimal resource allocations over time.

3. The demonstration of the application of the dynamic framework and model through three case studies associated with the current FRDC supported socio-economic valuation project (2001/065). This will advance the outputs from project 2001/065 in a logical, consistent and stepwise way

Final report

ISBN: 0-9756020-3-9

Author: John Nicholls

Final Report • 2006-10-17 • 1.53 MB

2003-039-DLD.pdf

Summary

Fisheries-related resources are finite and the need to share these resources among competing uses is inevitable. These resource sharing issues can be extremely contentious, politically difficult, and are often a significant drain on fisheries management agencies’ and stakeholders’ limited resources. Hence, there needs to be a consistently sound and rational basis for assessing these allocation issues that is widely understood and generally acceptable as fair and reasonable.

Socio-economic valuation tools are recognized as a key component of ecological sustainable development (ESD) assessments of our natural resources. Recent projects, including two previous FRDC-sponsored projects, describe both the appropriateness of such analyses and the need for their use.

The research in this project presents a dynamic model based on economic principles that can be used to evaluate the likely future direction of the socially optimal inter-sectoral resource allocations over time. The research illustrates the application of the model in three Western Australian case study fisheries. These case studies illustrate the nature of the data used to implement the model, the method of analyzing that data and the determination of the optimal allocation path over time using these data and relationships.