Cost Equations


 Before proceeding with a discussion concerning the estimation of

the cost equations for each state, a brief digression into the overall

model is necessary. The estimated catch equations express catch as a

function of the number of vessels and fishing power which, in turn, is a

function of the average crew size and average vessel size of vessels in

each state. Within the context of the current optimization model, the

determinants of fishing power are taken as exogeneous factors determined

at the firm level. Thus, the main decision variables utilized in deriv-

ing MEY are total catch in each state and the corresponding number of

vessels conditioned by fixed levels of fishing power.

 The relevant cost equations for each state correspond to the annual

cost of operating and maintaining a vessel with predetermined fishing

power. This cost is assumed to be constant with respect to variations

in catch. The cost per unit of output does, however, vary with catch.

In addition, cost varies with fishing power. Thus, the estimated cost

per vessel in the fishery is conditioned by average vessel size and

average crew size.

 Crewmen in the reef fishery are generally paid on a share basis.

Under this system, each crewman receives a fixed percentage of the total

dockside value of his catch minus his share of the grocery expenses.

Under such a system, the vessel captain and crewmen can be considered to

constitute a psuedo partnership since no set wage rate is employed. In

this case the crew size component of fishing power does not directly

affect the annual cost of operating and maintaining a vessel in the