Productivity Measurement in Common Property Resource Industries: An Application to the Pacific Coast Trawl Fishery

Abstract

This article measures total factor productivity in industries that exploit resources held in common. Particular attention is paid to the valuation and specification of in situ common-property resources in a neoclassical production technology, catchability of the resource, and variations in economic capacity utilization. An empirical analysis of the open-access Pacific coast trawl fishing industry demonstrates that disentangling the productivity residual from changes in resource abundance, its catchability, and variations in capacity utilization hones the productivity residual to finer precision, lowering mean productivity growth by about half. Removing biological noise from highly variable resources is also important. The results are related to a program limiting the number of vessels and can contribute to sustainable resource management whenever resources are held in common.