My impressions of the 2013 ICES Annual Science Conference

My impressions after a week of presentations, discussions, and lots of delicious food:

  • Of all the interdisciplinary conferences I’ve been to so far, the ICES meeting was the most scientific (read: least political, notwithstanding ICES’s role as advisory body for fisheries policy), and the most constructive in its interaction with social scientists (read: economists). Besides EAERE (which I consider a disciplinary meeting) I was once at an ESEE meeting, and once at the European Congress for Conservation Biology. I had mixed feelings about those for their tendency to bash “mainstream economics” (whatever that may be) and to blur the line between science and activism. Perhaps it’s because those communities have the hidden assumption that nature is best left alone by man, whereas fisheries scientists investigate, by definition, a form of interference in nature.
  • Is it just me, or is there a major disconnect between textbook fisheries economics and the practice of fisheries management? Concepts we teach (notably maximum economic yield and the role of the discount rate) are nowhere to be seen – in fact, I once heard a fisheries industry representative refer to maximum economic yield as “a plaything for economists”. In our teaching we hardly pay attention to the stochastic nature of fish stocks, but these days fisheries science is all about reference points and harvest control rules – which only make sense in a stochastic context.
  • Economists can make big contributions to fisheries management by further strengthening how fisheries models describe human behaviour. So far those contributions were largely confined to modelling where fishers fish, but what about investments in gear, or boats? Let alone market structures, global developments (tilapia!), value chains, and policy-makers.
  • Iceland is like an extreme version of Norway. Thought the Norwegian landscape was rugged? Iceland has volcanoes, and geysers! And where I thought Norwegians don’t give a hoot what the rest of the world thinks of hunting and whaling, only Icelanders can serve raw whale meat and rotten shark to a crowd of foreign scientists. (And it was delicious! The whale, that is.) Neither do Icelandic pubs have qualms with playing the entire Velvet Underground & Nico, including John Cale’s ear-piercing viola solo in Heroin.

My tuna paper for the upcoming EAERE conference

My paper for the upcoming EAERE conference (PDF here) deals with certification of a fishery that is practically unmanaged. Usually you should steer clear of such fisheries as they tend to be heavily overfished, but what if a bit of consumer power can still nudge fishing effort from bad practices to slightly less bad practices?

This is a contentious issue. The Marine Stewardship Council simply does not certify a fishery if it has no plausible management plan. This is understandable, because before you label a fishery ‘sustainable’ you should check whether it has any mechanism to prevent future overfishing. It’s the classical problem of open-access resources: if users cannot be excluded from harvesting, it will be a free-for-all, at the future’s peril. So we need some institution that does the excluding.

But now take a look at the Western Pacific tuna fishery. It may not be completely open-access, but given the sheer size of the area (I’m talking half the largest ocean on the planet here) and the number of sovereign states involved, it comes pretty close to a free-for-all. Some of the tuna species (skipjack) are hardly affected, but they are caught in ways that affect other species (yellowfin) that are doing less well (although, admittedly, not as disastrously as some others). Some fishers use Fish Aggregation Devices (FADs), which attract schools of skipjack as well as juvenile yellowfin; their catch tends to end up in your sandwich as canned tuna. Other fishers do not use FADs but look for free-swimming schools of tuna. These fishers can select schools consisting purely of skipjack or yellowfin, which enables them to avoid catching juvenile yellowfin. There are good economic reasons to leave juvenile yellowfin in the sea: just compare the price of a tuna steak to that of canned tuna. So we want less tuna from FADs, and perhaps more from free-swimming schools.

But this is where it gets tricky. We could tell consumers to stop buying tuna from FADs, and lure them towards the tuna from free-swimming schools by using some sort of ‘FAD-free tuna label’ (if you can find the space besides MSC, dolphin-friendly, FOS, RFS, Grüne Punkt, Fair Trade, and all the other labels out there). But remember this is an open-access fishery, so the free-swimming schools are very likely to be as overfished as other schools. If we could simply shift consumer demand from FAD tuna to FAD-free tuna that would be good, but there is a risk that the FAD-free tuna label also boosts overall demand for tuna. After all, the label may attract tuna-conscious consumers who feel they can now finally buy tuna without feeling guilty. And enhancing overall demand may make matters worse rather than better. This is a major concern with certification in general, but so far I haven’t come across anyone looking at this problem for tuna.

I wrote this paper with Martin Quaas of Kiel University. I’m very happy to work on this issue with him: he works on many fisheries problems, and he has ample experience in the type of microeconomic modelling that we apply here. It’s a huge problem, with many facets, and I feel we have so far only scratched the surface of it. We (not Martin, but me and my colleagues at Wageningen University) further explore the issue in the BESTTuna project, but then in a much more applied and detailed manner. BESTTuna is huge, with partners all over the Western and Central Pacific and about 12 PhD students from the same region. This paper is just me and a German professor covering the same issue in a handful of equations. But such simplified analyses can yield insights that more detailed studies don’t.

Economists need the softer social sciences

A follow-up to my remark on how few valuation studies include proper qualitative research: this remark was provoked by two travel cost studies presented at EAERE 2012. One looked at the effect that forest fires have on visit rates in Portuguese forests, whereas the other studied how people trade off entrance fees and mortality risk while visiting a nature reserve in Japan.

The Portuguese study reminded me of a paper by Erwin Bulte and others on what they called the ‘outrage effect’. They found that people are willing to pay a lot more for conservation of Wadden Sea seals if you tell them the population suffers from pollution than if you tell them the seals suffer from a viral disease. I would expect something similar to happen with regard to forest fires. People might even appreciate a scorched patch of forest if you tell them it is part of a natural or at least indispensible process, but they would be apalled if the fires were caused by human carelessness. I would also expect it matters whether multiple hectares are gone, or whether there are only occasional blackened patches. The researchers did not ask their respondents what they thought was the cause of forest fires, but almost all forest fires in their region were man-made, and they assumed their respondents were aware of that fact.

The Japanese study reminded me of the Darwin Awards, or rather, the fact that most of its recipients are intoxicated, overconfident males. Suppose a respondent prefers a $20 dangerous hike over a $30 safe one, does that mean that he considers $10 too much to lower his risk of getting killed? Or does he (I’m afraid it’s mostly a ‘he’) assume that bad stuff only happens to other people? In this case the researchers stated that it was widely known which hiking trails are dangerous, and that casualties have been all over the news. But that argument ignores how good some people are at downplaying risks – at their peril, indeed.

The bottom line for me is that too much economic research, especially the valuation stuff, seems to blindly jump into the issue, imposing wildly unrealistic assumptions on human behaviour, without doing proper explorative research first. Why not interview a few hikers first, to get an idea what considerations may be at play? Why not talk to a psychologist, or a sociologist, who has done research on how people view their own mortality risks?

I think economists should observe more, and take more heed of what other social scientists have found so far about human behaviour. Economics is a world apart from most other social sciences, notably sociology and anthropology. (Supposedly, an unnamed Hindu economist once claimed that bad economists reincarnate as sociologists.) But I think this is finally changing, as Economics Nobel prizes1 are being awarded to behavioural economists and political scientists, and economic experiments have become fashionable enough to be published in top journals like American Economic Review.

So how does this relate to my own work? Besides other activities, my work involves modelling of how people exploit natural resources, and estimating how valuable those resources are to them. I think the time is ripe to do such work together with anthropologists and sociologists. I am about to start a research project on international cooperation in management of Pacific tuna, together with Simon Bush from Wageningen University’s Environmental Policy Group. But I’ll keep my eyes open for opportunities to do more such interdisciplinary work.

1 Actually, I don’t like calling the Economics Nobel an Economics Nobel. It’s just that Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, as it is officially called, is a bit too long. But there is no such thing as a Nobel Prize for Economics. The only reason why there is an Economics prize that has “Nobel” in its name, and not, say, a similar biology prize, is that economists work at banks such as the Swedish central bank, and thereby have access to enough money to create the fund for such a prize. Unlike biology faculties.

My highlights from EAERE 2012

My highlights from the 19th annual conference of the European Association of Environmental and Resource Economists:

  • I was surprised to see how crude estimates of travel costs still are in non-market valuations of recreational sites;
  • Also, how few of those studies have done a proper qualitative analysis before they do their quantitative study;
  • Linda Nøstbakken had a very nice paper on how a combination of diversified monitoring and self-reporting incentives can greatly enhance monitoring of fisheries legislation;
  • Martin Quaas proposed using a “shadow interest rate” as a way of expressing the quality of fisheries management;
  • Nick Hanley is a Les Paul man:

And rightly so; Fender people are evil.

It’s going to be an interesting EAERE this year

Whoever is bored of the EAERE welcome reception and wants to hear some weird music: I’ll be playing that evening in Prague with these guys:

Meet L’Arrache-Coeur, a Czech group playing a very liberal interpretation of French trad music and klezmer. The guy playing the hurdy-gurdy (that’s the instrument that looks like a cross between a fiddle and a coffee grinder) is Daniel Kahuda: Daniel stayed in Wageningen a few years ago, where he was a regular visitor of our monthly folk session.

Some years later I was in Prague for the European Congress of Conservation Biology (with very mixed feelings, I must say – see my posts on economics vs ecology). We met up and had a few great gigs and sessions. Here is a picture taken at the Grabstejn World Fest, where we played with L’Arrache-Coeur’s accordion player František Tomášek and Puck Duits, who is one of Holland’s best bagpipe players.

Anyway, L’Arrache-Coeur is playing on Wednesday evening 27 June, and Daniel invited me to join them. The place is called Cafe-Bar Bajkazyl, and apparently it’s a cross between a bar and a bike rental. I have no idea what I’m getting myself into, but I’m sure it’ll be fun. Environmental and resource economists welcome.

I can refer to The Cure at the next EAERE conference

Anyone who had a radio in the 1980s should know these lyrics:

Misjudged your limits
Pushed you too far

It neatly describes my paper with Christopher Costello and Michael Springborn that has just been accepted for presentation at this year’s EAERE conference in Prague. The general idea of the paper is this: you are doing something you like, and the more intensively you do it the more you like it. There is a danger, however, of going too far, and if you go too far something nasty happens. Your problem is, you don’t know how far is too far. Will you stay on the safe side? Will you experiment to find out what ‘going too far’ actually means? How much will you experiment? When do you stop experimenting? And how does this all depend on what you already know, and the consequences of crossing the line? That is what the paper is about.

You may wonder what this has to do with the economics of ecosystems. There are several examples of ecosystems suddenly collapsing under man-made pressures such as pollution or exploitation. The most well-known example of this is the shallow lake. You can add phosphorus to a clear shallow lake without noticing any effects, until the phosphorus content crosses a line and the lake suddenly turns turbid. This regime shift, as ecologists call it, happens all of a sudden. It is not like your pasta boiling over, where you can turn the gas down to limit the damage when it happens. And it matters economically whether the lake is clear or turbid: swimmers, anglers and divers prefer clear lakes to turbid ones, so you could lose a lot of recreational values. Moreover, reversing the process is expensive: you need to reduce the phosphorus content to a level much lower than the level that triggered the shift to the turbid state. In many cases you also need to fish intensively for species like bream, because bream enhance the turbid state by stirring up the bottom when they look for food. (By the way, Wageningen University’s Mister Shallow Lake, Marten Scheffer, used to play in one of the most legendary Dutch folk bands.)

While working on the paper I realised the problem is actually quite general. The captain of the Costa Concordia faced a similar decision: the closer he got to the Giglio shore to make his salute, the more likely he was to run aground. In his case the consequences of “going too far” are huge: at this moment 30 passengers are confirmed dead while two are still missing.

On a lighter note, Robert Smith describes the same problem in those lines quoted above. I take it he spent just a tad too much time in the pub, at least more than he thought his girlfriend would accept. In some relationships this may cost no more than a box of chocolates, but in the song he loses his relationship altogether. At least he got a hit single out of that experience.