Measuring, interpreting and monitoring economic efficiency in South Australia’s Spencer Gulf and West Coast Prawn Fisheries

Abstract

Fishers and fishing vessels are not homogeneous, with their level of catch affected by the choice of physical inputs such as engine size, boat size and the type of fishing technology employed, as well as less tangible factors such as skipper skill and experience. Economic output also vitally depends upon the value of the product in the market and the cost of inputs. These differences in the ability of individual fishers to catch fish, and create economic returns, can be assessed through the application of efficiency analysis. This paper provides an empirical examination of efficiency indicators in the South Australian Spencer Gulf and West Coast Prawn Fisheries. Applying data envelopment analysis (DEA) to a unique vessel-level dataset that includes both quantity and value information, we estimate measures of efficiency in these input-controlled fisheries where effort decisions are made in real-time using a participative management approach. We find that quantity and value-based efficiency measures are relatively high but that the variability of value-based measures is increasing. This increasing heterogeneity in value, despite the homogeneity in quantities, has potential implications for pressures on cooperative management going forwards as fishers pursue different business strategies. Comparing the measures of efficiency to direct measures of individual profit, we find a divergence: technical and cost measures of efficiency are more strongly positively related to short-run economic performance while revenue-efficiency is more strongly positively correlated with long-run economic performance, suggesting that different efficiency metrics may be required for short- and long-run monitoring.