Stochastic frontier, Efficiency probability
We use a stochastic production frontier model to investigate the presence of heterogeneous production and its impact on fleet capacity and capacity utilization in a multi-species fishery. We propose a new fleet capacity estimate that incorporates complete information on the stochastic differences between vessel-specific technical efficiency distributions. Results indicate that ignoring heterogeneity in production technologies within a multispecies fishery as well as the complete distribution of a vessel’s technical efficiency score, may lead to erroneous fleet-wide production profiles and estimates of capacity. Our new estimate of capacity enables out-of-sample production predictions which may be useful to policy makers.
Feltoven, Ronald G.; Horrace, William C.; and Schnier, Kurt E., "Estimating Heterogeneous Capacity and Capacity Utilization in a Multi-Species Fishery" (2006). Economics Faculty Scholarship. 25.
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