Bioeconomic Modeling of the Gulf Shrimp Fishery: An Application to Galveston Bay and Adjacent Offshore Areas

Abstract

The concept of laissez-faire is widely recognized in capitalistic economies. At the core of this operating philosophy is the belief that individualistic competition will result in an economic improvement, not only for the individual but also for society. However, when this approach is tied to the exploitation of a common property resource, the outcome is just the opposite—in terms of economic efficiency the common property resource is overexploited because the factor cost to the firm does not equal the opportunity cost to society. That is, although a common property resource is a scarce good to society, it is a free good to individuals. The usual result is a level of exploitation which may endanger the future biological viability of the resource. With shrimp, however, this concern is not critical because shrimp is an annual crop; fishing will cease as a result of economic, and not biological, considerations.