Multi‐Output, Nonfrontier Primal Measures of Capacity and Capacity Utilization

Abstract

This article implements an econometric approach for generating primal capacity output and utilization measures for fisheries. In situations where regulatory, environmental, and resource conditions affect catch levels but are not independently identified in the data, frontier‐based capacity models may interpret such impacts as production inefficiency. However, if such inefficiencies are unlikely to be eliminated, the implied potential output increases may be unrealistic. We develop a multi‐output, multi‐input stochastic transformation function framework that permits various assumptions about how output composition may change when operating at full capacity. We apply our model to catcher‐processor vessels in the Alaskan pollock fishery.