Preprint

Food and Fraud: On the Codfather and Harvest Mislabeling

Authors:
  • Northeast Fisheries Science Center, United States, Woods Hole
Preprints and early-stage research may not have been peer reviewed yet.
To read the file of this research, you can request a copy directly from the authors.

Abstract

This paper studies incentives to mislabel the species harvested in multispecies fisheries managed by tradeable catch shares. When coupled with imperfect monitoring , the joint production that characterizes this industry makes mislabeling hard for the regulator to detect and profitable over long periods of time, as illustrated by the recent high-profile case of the Codfather in New England fisheries. Reporting the harvest of species with strict catch limits as a more plentiful species allows vessel owners to save in quota rental costs but carries an expected penalty and a lower product margin as complicit dealers require a payment to engage in the scheme. We develop a theoretical model to explore the implications of this behavior for equilibrium quota rental prices, allocation of effort, and for the viability of management strategies that rely on the precautionary principle as described in the Magnuson-Stevens Act and National Standard 1. In the empirical application we compile a novel data set in order to investigate the misreporting of species' catches into federal seafood dealer databases in the Northeast US. We estimate a latent class mixture model and associated harvest technologies, and are able to partially validate the resulting predictions using data from recent criminal proceedings brought against the Codfather. The paper develops an effective approach to identifying seafood misreporting and could be used for studying food fraud more broadly.

No file available

Request Full-text Paper PDF

To read the file of this research,
you can request a copy directly from the authors.

ResearchGate has not been able to resolve any citations for this publication.
Article
Full-text available
We analyze the interplay between policies aimed to control transboundary and local pollutants such as greenhouse gases and particulate matter. The two types of pollution interact in the abatement cost function of the polluting firms through economies or diseconomies of scope. They are regulated by distinct entities, potentially with different instruments that are designed according to some specific agenda. We show that the choice of regulatory instrument and the timing of the regulations matter for efficiency. Emissions of the local pollutant are distorted if the regulators anticipate that transboundary pollution will later be regulated through emission caps. The regulation is too stringent with diseconomies of scope, and not enough with economies of scope. In contrast, we obtain efficiency if the transboundary pollutant is regulated by emission taxes or tradable emission permits provided that the revenue from taxing emissions are redistributed to the countries in a lump-sum way and that the initial allocation of tradable emission permits is not linked to abatement costs.
Article
Full-text available
While localist visions of alternative food systems advocate for the expansion of local ecological knowledge through more proximate producerconsumer relationships, globalized seafood supply-demand chains persist. Moving beyond this dichotomy, commons scholars recognize that collective action among resource users at the local level can shape cross-scalar producer relations with government and more capitalized firms operating in regional and global markets. In the case of the New England groundfishery, a quasi-public fish auction not only transformed the scalar, logistical, and financial parameters of harvester-buyer relationships, it altered the production and use of local knowledge among some harvesters, and their technological choices. Resulting markets offer potential benefits that extend to broader publics, by increasing the monetary value and experimental development of a knowledge commons. Qualitative analysis of field data shows that with new market transparency, fish are no longer valued as an undifferentiated commodity, but as a variety of products with individually nuanced price structures. Displacement of local seafood buyers incurred some shoreside job losses, but fishers on smaller, owner-operated boats in multi-generational fishing harbours benefit particularly from new opportunities compared to larger, fleet boats due to different labour relations, allocations of decision-making responsibilities, observational contexts, and associated information flows. Implications for the mobilization of knowledge-action linkages to influence formal resource management arenas merit further research. © content is licensed under a Creative Commons Attribution 3.0 License.
Article
Full-text available
Atlantic cod (Gadus morhua) has been culturally important in the northeast United States (US) for hundreds of years. This research estimates a hedonic model of cod prices in the Northeast US from 2005–2011. While large fish typically receive premium prices, the largest cod receive prices that are approximately $0.20 per pound lower than fish in the next largest market category. A moderate premium for freshness is found: cod caught on trips that last four days receive $0.04 less per pound than fish that is caught on shorter trips. This discount rises to nearly $0.15 per pound for trips lasting 10 days or longer. A similar discount exists for fish that are stored for two or more days after landing. The premia estimated by the hedonic price model are quite different from the group mean premia, suggesting that bioeconomic models that incorporate price heterogeneity should consider more sophisticated price models. JEL Codes: Q22, Q50, D40.
Article
Full-text available
The error term in the stochastic frontier model is of the form (v–u), where v is a normal error term representing pure randomness, and u is a non-negative error term representing technical inefficiency. The entire (v–u) is easily estimated for each observation, but a previously unsolved problem is how to separate it into its two components, v and u. This paper suggests a solution to this problem, by considering the expected value of u, conditional on (v–u). An explicit formula is given for the half-normal and exponential cases.
Article
Full-text available
In this paper, we estimate a multi-output distance function for two North Sea fleet segments and derive output elasticities of substitution to examine the potential for changing catch composition though targeting fishing activity. We find that this ability differs between fleet segments, and also within fleet segments due to differences in vessel characteristics, with larger vessels appearing to be more able to influence their catch composition than smaller vessels. We argue that failure to quantify and integrate these technical interactions in the construction of management instruments for fisheries regulation may result in increased discarding and/or illegal fishing.
Article
Full-text available
The single-output production function has long been regarded as one of the principle limitations of the econometric approach to technical efficiency measurement. If one wished to investigate efficiency in a multiple-output industry using econometric methods one would usually either: (a) aggregate outputs into a single index of output (e.g., total revenue or a multilateral Tornqvist output index); or (b) attempt to model the technology using a dual cost function. The first of these methods require that output prices be observable (and reflect revenue maximising behaviour), while the latter approach requires an assumption of cost-minimising behaviour. There are a number of instances, however, when neither of these requirements are met (the public sector contains many examples). In this study we outline the recently developed distance function solution to the multi-output problem. The method is illustrated using data on European railways. Output-orientated, input-orientated and constant returns to scale distance functions are estimated using corrected ordinary least squares. The distance function estimates are also compared with production function estimates involving aggregate output measures. These comparisons indicate that, for the case of European railways, a production function involving a multilateral Tornqvist output index exhibits substantially less aggregation bias relative to a production function that uses total revenue as a measure of aggregate output.
Article
Full-text available
A multiproduct translog cost function is estimated using cross section data from Florida's municipal police departments. The estimated coefficients are used to calculate economies of scale in police production. We find significant scale diseconomies in police production in our sample. The sources of these scale diseconomies are large municipal police departments. We also find no evidence of economies of scope.
Article
Full-text available
Demand for environmental quality of a fishery product and its effect on the incentive to manage fisheries sustainably is analyzed using bioeconomic modeling. The paper examines the effectiveness of an ecolabel in achieving sustainable fisheries production under open-access, limited-access and optimally managed fisheries with price premiums for ecolabeled products that are either constant or a function of sustainability criteria. In addition, the paper investigates the effect of placing an ecolabel on the rate of recovery of an overfished stock.
Article
Full-text available
An alternative to traditional regulations of fisheries to avoid rent dissipation is the use of individual transferable quotas (ITQ s ) where prices in the quota market provide the necessary information to owners of harvest rights to contract with each other. However, even under such a decentralized regime, information on the underlying technology of the fishing vessels is also necessary. First, since most fisheries consist of many interrelated production processes, in order to avoid rent dissipation by discarding wrong output mix etc., the structure of production in the multispecies fishery must be known to design a proper quota system. Second, an ITQ system may create incentives for misreporting by understating the actual catch. This may especially be the case where the expected degree of self-enforcement is low. The paper proposes a way to reduce the information requirements under regulation with asymmetric information by constructing a typical firm and comparing performance for the other vessels to this firm. Based on the typical firm, and if the industry is relatively homogenous, the performance and hence catch of any other firm in the industry can be predicted within a certain range. Further, the paper applies this idea to the Norwegian trawler fleet to assess the production structure in terms of jointness, input-output separability, and the supply and demand elasticities for the fishing firms. This information characterizes the fishery and thus how the quota system may be designed and how to construct a yardstick in order to reduce the enforcement cost under a decentralized regulation of ITQs.
Article
Full-text available
The long-run multiproduct profit function is developed to provide a more general procedure than the s tatic minimum cost function to examine the technological and cost det erminants of multiproduct industry structure and the likely form of a ny market equilibrium. In this approach, outputs are endogenous and t he long-run equilibrium levels of quasi-fixed factors are endogenousl y determined. The multiproduct structure of the multispecies New Engl and fishing industry and the likely multiproduct form of any open-acc ess equilibrium are examined.
Article
Full-text available
The hypothesis of non-jointness in input quantities (separate production functions) is well-known, and it plays an important role in many areas of economics. In this paper we define three additional forms of non-jointness which have received little or no attention in the literature, and which might be relevant for the firm as well as for the representation of the aggregate technology. We characterize all forms of non-jointness in terms of variable profit and joint cost functions. This yields a number of restrictions which are all testable empirically.
Preprint
Executive SummaryIf you order red snapper at a restaurant, you should get red snapper. If you found out it was something else, you would rightly be angry. But what if you also found out that the fish you ate may have been caught illegally, or had been imported when you thought it was caught locally? Seafood mislabeling can also cover up fish caught or raised with fishing or farming methods that can harm the environment. Overfished species can be labeled as more abundant varieties and cheaper offerings can be sold as more expensive ones to fetch a higher price. Seafood fraud cheats consumers and hurts fishermen and businesses that play by the rules.To highlight and address these problems, Oceana has investigated seafood fraud since 2010, testing more than 1,500 samples for DNA identification. In these studies, Oceana found roughly one-third of samples tested were mislabeled. Oceana brought this issue to the public’s attention and urged the government to act.In 2014, the federal government established the Task Force on Combating Illegal, Unreported and Unregulated (IUU) Fishing and Seafood Fraud. The task force issued recommendations that ultimately led to the establishment of the Seafood Import Monitoring Program (SIMP) in 2018. SIMP requires catch reporting and traceability for 13 types of imported seafood at risk of seafood fraud and illegal fishing. However, the traceability requirements end at the U.S. border.To expose gaps in the current policy, Oceana launched a nationwide investigation of some popular seafood types not covered by the program. Oceana employees and volunteers collected more than 400 samples from over 250 locations in 24 states and the District of Columbia, including restaurants, large grocery stores and smaller markets. Despite the new program, Oceana discovered seafood mislabeling remains a problem in the United States.Key Findings:• One out of every 5 of the 449 fish tested (21 percent) were mislabeled.• Some of the most commonly collected seafood types in the study, sea bass and snapper, had the highest rates of mislabeling (55 and 42 percent, respectively).• One out of 3 establishments visited sold at least one item of mislabeled seafood.• Seafood was more frequently mislabeled at restaurants and smaller markets than at the larger chain grocery stores.• Some popular regional favorites, such as local Great Lakes yellow perch, were found to be imported fish like zander, a species from Europe and Asia.• Some depleted fish species that are not sustainably caught were labeled and sold as more sustainable fish (e.g. overfished Atlantic halibut sold as more abundant Pacific halibut).Seafood fraud remains an issue, including for many species that are not covered by the federal traceability regulations. Oceana recommends that those rules be expanded, requiring catch documentation detailing when, where and how a fish was caught or farmed for all seafood. This and other important information should follow the fish through every step of the supply chain from where it was caught to the final point of sale. Consumers should be provided with more information about the seafood they eat, including exactly which species they purchased. This is the only way U.S. consumers can know that their seafood is safe, legally caught and honestly labeled.
Article
In the management of natural resources, regulation often induces behavioral responses by resource users that ultimately undermine stated policy objectives. Examples of these unintended consequences have been associated with regulations ranging from the Endangered Species Act to laws governing clean air. In this paper we investigate an unintended behavioral response that can be triggered by conservation measures in multispecies fishery management, which leads to increased targeting of the species the conservation measures are meant to protect. Harvest is subject to stochastic variation, with output partially determined by the probability of encountering species of interest, either due to targeting or avoidance. Given the right conditions, an intertemporal arbitrage opportunity arises due to the fact that by targeting a stock in the current period, the probability of encountering that stock in the next period, when announced conservation measures are implemented, decreases. We present an empirical case study that supports the findings of the theoretical model. The results indicate that, by targeting so called weak stocks, some New England fishermen are willing to trade off increased costs today for increased expected profits in the future. To prevent the potentially harmful effects of this behavioral response, a manager may adopt precautionary provisions at the time a quota reduction is announced, or alternatively allow the industry to bank part of its current season's quota in order to alleviate the consequences of the reduction in the ensuing period. These results highlight the challenge of developing effective conservation strategies.
Article
Interest in expanding market-based approaches involving intra-pollutant trading (trading “like” pollutants) to allow inter-pollutant trading (trading “dis-similar” pollutants) is growing. Because many pollutants are regulated separately, designing inter-pollutant markets requires considering pre-existing regulatory constraints. We examine the optimal choices of inter- and intra-pollutant trade ratios when (i) some firms generate multiple pollutants affecting different media and (ii) permit caps are sub-optimal, having been exogenously specified by prior regulations. While the first-best outcome is unobtainable in this setting, we find inter-pollutant trading enhances efficiency by offering an additional policy instrument: the inter-pollutant trade ratio. Moreover, adjustments to intra-pollutant trade ratios reflecting the joint production of dis-similar pollutants can enhance efficiency. We also find realistic cases where inter-pollutant trading may universally improve environmental quality, easing concerns that trading across environmental media may harm one medium. An example of nitrogen trading in Pennsylvania’s Susquehanna River Basin illustrates our results.
Article
Food fraud, or the act of defrauding buyers of food or ingredients for economic gain-whether they be consumers or food manufacturers, retailers, and importers-has vexed the food industry throughout history. Some of the earliest reported cases of food fraud, dating back thousands of years, involved olive oil, tea, wine, and spices. These products continue to be associated with fraud, along with some other foods. Although the vast majority of fraud incidents do not pose a public health risk, some cases have resulted in actual or potential public health risks. Perhaps the most high-profile case has involved the addition of melamine to high-protein feed and milk-based products to artificially inflate protein values in products that may have been diluted. In 2007, pet food adulterated with melamine reportedly killed a large number of dogs and cats in the United States, followed by reports that melamine-contaminated baby formula had sickened thousands of Chinese children. Fraud was also a motive behind Peanut Corporation of America's actions in connection with the Salmonella outbreak in 2009, which killed 9 people and sickened 700. Reports also indicate that fish and seafood fraud is widespread, consisting mostly of a lower-valued species, which may be associated with some types of food poisoning or allergens, mislabeled as a highervalue species. Other types of foods associated with fraud include honey, meat and grain-based foods, fruit juices, organic foods, coffee, and some highly processed foods. It is not known conclusively how widespread food fraud is in the United States or worldwide. In part, this is because those who commit food fraud want to avoid detection and do not necessarily intend to cause physical harm. Most incidents go undetected since they usually do not result in a food safety risk and consumers often do not notice a quality problem. Although the full scale of food fraud is not known, the number of documented incidents may be a small fraction of the true number of incidents. The Grocery Manufacturers Association estimates that fraud may cost the global food industry between $10 billion and $15 billion per year, affecting approximately 10% of all commercially sold food products. Fraud resulting in a food safety or public health risk event could have significant financial or public relations consequences for a food industry or company. There is no statutory definition of food fraud or "economically motivated adulteration" (EMA) of foods or food ingredients in the United States. However, as part of a 2009 public meeting, the Food and Drug Administration (FDA) adopted a working definition, defining EMA as the "fraudulent, intentional substitution or addition of a substance in a product for the purpose of increasing the apparent value of the product or reducing the cost of its production, i.e., for economic gain." Efforts are ongoing to compile and capture current and historical data on food fraud and EMA incidents through the creation of databases and repositories. Over the years, Congress has introduced a number of bills intended to address concerns about food fraud for a particular food or food ingredient. Such legislation has not addressed food fraud in a comprehensive manner. However, although no single federal agency or U.S. law directly addresses food fraud, a number of existing laws and statutes already provide the authority for various federal agencies to address fraud. Currently, food fraud is broadly addressed through various food safety, food defense, and food quality authorities as well as border protection and import authorities across a number of federal agencies. FDA and the U.S. Department of Agriculture are the principle agencies that are working to protect the food supply from food safety risks-both unintentionally and intentionally introduced contamination-in conjunction with border protection and enforcement activities by the U.S. Department of Homeland Security. Other agencies also play a role.
Article
Food Fraud can be an extremely profitable act even considering the capital investment of executing a complex and technologically challenging activity. This research was conducted to increase awareness of the economic motivation of Food Fraud through case studies that include commodity and finished goods pricing. The research objective was to establish a firm understanding of the economic drivers of Food Fraud. Examples provide insight on the macro- and micro-economic influences on the fraud opportunity. Specific case studies include: the Fraud Opportunity per One Shipment, Horsemeat in Beef, Selling Salmonella Contaminated Peanuts, Melamine in Wheat Gluten. An ingredient level review of a hypothetical food fraud example is also presented. Findings confirm that a single shipment of fraudulent food can result in tens of thousands of dollars in illegal profit. While the economic gain of a food fraud can be calculated based on an ingredient-level evaluation, the full economic impact of a food fraud incident is often incalculable.
Article
This paper is concerned with applications of mixture models in econometrics. Focused attention is given to semiparametric and nonparametric models that incorporate mixture distributions, where important issues about model specifications arise. For example, there is a significant difference between a finite mixture and a continuous mixture in terms of model identifiability. Likewise, the dimension of the latent mixing variables is a critical issue, in particular when a continuous mixture is used. Applications of mixture models to address various problems in econometrics, such as unobserved heterogeneity and multiple equilibria, are presented. New nonparametric identification results are developed for finite mixture models with testable exclusion restrictions without relying on an identification-at-infinity assumption on covariates. The results apply to mixtures with both continuous and discrete covariates, delivering point identification under weak conditions. This article is protected by copyright. All rights reserved
Article
Considering that seafood mislabeling has been widely reported throughout the world and that the authentication of food components is one of the key issues in food safety, quality and sustainability, the aim of this study was to use DNA barcoding to investigate the prevalence of mislabeling among fish fillet products from markets and supermarkets located in Apulia (SE Italy). The study reveals a high degree of species mislabeling in fish fillet products. In particular, this study shows that the labels of only 32/200 fish fillet samples provided comprehensive information relating to commercial designation, scientific name, geographical area, production method and whether previously frozen. The labeling of other samples was not compliant with European legislation. Indeed, the scientific name, which must also be indicated from 1st January 2012, according to Article 68 of EU Commission Implementing Regulation No. 404/2011, was missing in 157/168 samples, the geographical area was missing in 152/168, while the commercial designation and the production method were reported in all samples. Furthermore, results from molecular investigations reveal a high occurrence of incorrect species declaration in fish fillet products. The commercial and/or scientific name declared failed to match the species identified in 164/200 (82%) samples. The study also highlighted that threatened, Vulnerable (VU), Endangered (EN) and Critically Endangered (CR) species considered to be facing a high risk of extinction has been used in the place of commercial species. This study thus provides further evidence of the need for increased traceability and assessment of food product authenticity. Additionally, traceability may improve the management of hazards related to fish safety, as well as guaranteeing product authenticity, providing reliable information to customers, enhancing supply-side management and improving product quality and sustainability.
Article
The objective of this study is to explore the current strategies available to monitor and detect the economically and criminally motivated adulteration of food, identifying their strengths and weaknesses and recommend new approaches and policies to strengthen future capabilities to counter adulteration in a globalized food environment. There are many techniques used to detect the presence of adulterants, however this approach relies on the adulterant or means of substitution being “known” and no food item can ever be declared truly free of adulteration on that basis. Further techniques will verify the provenance claims made about a food product e.g. breed, variety etc. as well as techniques to identify original geographic location of food production. These consider wholeness, or not, of a food item and do not need to necessarily identify the actual adulterant. The conceptual framework developed in this research focuses on the process of predicting, detecting and reacting to economically and criminally motivated food adulteration.
Article
Conservation organizations seeking to reduce over-fishing and promote better fishing practices have increasingly turned to market-based mechanisms such as environmental sustainability labels (eco-labels) in order to shift patterns of household consumption. This paper presents an analysis of consumer response to an advisory for sustainable seafood adopted by a regional supermarket in the United States. The advisory consisted of a label in which one of three traffic light colors was placed on each fresh seafood product to inform consumers about its relative environmental sustainability. Green meant “best” choice, yellow meant “proceed with caution,” and red meant “worst choice”. Using a unique product-level panel scanner data set of weekly sales and taking advantage of the random phase-in of the advisory by the retailer, we apply a difference-in-differences identification strategy to estimate the effect of the advisory on overall seafood sales as well as the heterogeneous impact of the advisory by label color and whether the seafood met additional health-related criteria. We find evidence that the advisory led to a statistically significant 15.3% decline in overall seafood sales, a statistically significant 34.9% decline in the sale of yellow labeled seafood, and a statistically significant 41.3% decline in the sale of yellow labeled seafood on a mercury safe list. We find no statistically significant difference in sales of green or red labeled seafood.
Article
We examine the choice of policy instrument price, quantity, or a mix of the two when two pollutants are regulated and firms’ abatement costs are private information. A key parameter that affects this choice is the technological externality between the abatement efforts involved, i.e., whether they are substitutes or complements. If they are complements, a mix policy instrument with a tax on one pollutant and a quota on the other is sometime preferable, even if the pollutants are identical in terms of benefits and costs of abatement. Yet, if they are substitutes, the mix policy is dominated by taxes or quotas.
Article
Accurate seafood labels can play a role in encouraging sustainable fisheries operation, by helping consumers to correctly identify the origins of seafood products, and thereby allowing them to make informed, responsible purchasing decisions. Yet, the renaming and mislabeling of seafood - as a consequence of ineffective regulations or poor policy implementation - remain serious problems. Here, we show that 39 out of 156 (25%) cod and haddock products, randomly sampled from supermarkets, fishmongers' shops, and take-away restaurants throughout Dublin, Ireland, were genetically identified as entirely different species from that indicated on the product labels, and therefore were considered mislabeled under European Union (EU) regulations. More significantly, 28 out of 34 (82.4%) smoked fish samples were found to be mislabeled. These results indicate that the strict EU policies currently in place to regulate seafood labeling have not been adequately implemented and enforced. Although the problem of seafood mislabeling has recently been brought to public attention in North America, we show here that product mislabeling is also an issue in Europe. We suggest that - through sustained consumer misinformation - mislabeling may hamper efforts to allow depleted cod stocks to recover.
Article
This paper examines the compliance behaviour of a dominant firm in an output quota market when the firm is able to exercise market power in both the quota and the output markets. Provided the firm has an initial quota endowment which is strictly positive, under some circumstances the firm may find it profitable to comply or even over-comply in its quota demand, even in the absence of enforcement. The results are compared to those found in the pollution permit literature for a firm with market dominance only in the permit market, to which some additional observations are also added concerning efficiency outcomes under non-compliance.
Article
Purpose – The purpose of this paper is to address the topic of food fraud which has been so widely and variously reported over recent months and years. Its purposes are to set current experience into an historical context and to illustrate the tension between the science of deception and the science of detection. Design/methodology/approach – This is a desk study of published literature and historical documentation, together with interviews with those professionally concerned with detection and enforcement. Findings – The piece concludes that with all the scientific developments and analytical techniques that seem so mind-bendingly sophisticated, there remains the basic problem of a lack of resources. Practical implications – It is asserted that more is owed to the memories and the reputations of those who pioneered the effort to combat food fraud. Without a considerable increase in the resources made available for the appliance of the science currently available and that being developed, the battle will never be fully engaged, yet alone won. Originality/value – This review is unique in that it seeks to take a long view of current concern, and even scandal, showing that the situation is not new and lessons should have been learned from past experience.
Article
U.S. food and agricultural imports have increased significantly in recent years. A series of recent incidents have raised safety concerns about the many foods, medicines, and other products from China in particular. U.S. imports of all Chinese food, agricultural, and seafood products have increased from nearly 0.411 million metric tons (MMT) in 1996 to 1.833 MMT in 2006, a 346% rise. Two federal agencies - FDA and the U.S. Department of Agriculture's (USDA's) Food Safety and Inspection Service (FSIS) - are primarily responsible for the government's food regulatory system. For imports, FSIS (which has oversight over most meat and poultry) relies on a very different regulatory system than FDA (which has oversight over other foods). Although all imported food products must meet the same safety standards as domestically produced foods, international trade rules permit a foreign country to apply its own, differing, regulatory authorities and institutional systems in meeting such standards, under a concept known as "equivalence." Some Members of Congress have expressed sharp criticism of both China's food safety record and U.S. efforts to insure the safety of imports. Congressional committees have held, or are planning, hearings on food safety concerns. On May 2, 2007, Sen. Durbin won unanimous approval of an amendment to the Senate-passed FDA Revitalization Act (S. 1082) that would require domestic and foreign facilities to notify FDA of food safety problems, and would require FDA to establish a central registry for collecting information and notifying the public about adulterated foods. The amendment includes elements of his proposed Human and Pet Food Safety Act of 2007 (S. 1274). Separate bills (S. 1776 and H.R. 2997) would, among other things, impose new user fees on food imports to help cover the cost of their screening. More comprehensive bills (H.R. 1148/S. 654) would combine current federal food safety oversight under a new food safety administration.
Article
This article addresses the interface between law and the morality of civil society. It starts with a review of the discourse between the utilitarian approach to rationality and perspectives which include normative action. It subsequently explores the ...
Article
This paper examines several extensions of the stochastic frontier that account for unmeasured heterogeneity as well as firm inefficiency. The fixed effects model is extended to the stochastic frontier model using results that specifically employ its nonlinear specification. Based on Monte Carlo results, we find that the incidental parameters problem operates on the coefficient estimates in the fixed effects stochastic frontier model in ways that are somewhat at odds with other familiar results. We consider a special case of the random parameters model that produces a random effects model that preserves the central feature of the stochastic frontier model and accommodates heterogeneity. We then examine random parameters and latent class models. In these cases, explicit models for firm heterogeneity are built into the stochastic frontier. Comparisons with received results for these models are presented in an application to the U.S. banking industry.
Article
This paper treats illegal landings and discards of fish as a moral hazard problem that arises from individual catches that are unobservable to society, and hence are private information. A tax/subsidy mechanism taking into account the asymmetric information problem is formulated as a solution to problems of illegal landings and discards. The incentive scheme uses fish stock size as the tax variable, and can be seen as an alternative to a control policy. Rough estimates from a simulation study suggest that the incentive scheme is potentially useful.
Article
This paper examines a market for pollution permits in which one firm has market power and one or more firms is noncompliant. I show that the firm with market power may choose to hold more permits than it needs, effectively retiring permits from the market. I also show that some noncompliance may be socially desirable because it can mitigate the distortion caused by market power. Similarly, some degree of market power may be socially desirable because it can, in turn, mitigate the distortion caused by noncompliance.
Article
Individual quota (IQ) programs are a promising and increasingly common means of regulating fisheries. This paper examines how profit maximizing fishers respond to different types of IQ programs in fisheries where many types of fish are harvested simultaneously. This analysis shows that the most common types of individual quota programs can induce discarding, and that individual quota programs that regulate the value of harvests never induce discarding. Since discarded fish have a high mortality rate, “value-based” individual quota programs are superior to their more conventional counterparts in that they waste fewer fish. The disadvantages of value-based quotas are also examined. Results are driven by the fact that the harvest technology examined here does not satisfy a “free-disposal” assumption. Since this free-disposal assumption is ubiquitous in production theory, and not obviously true, the framework developed herein may be useful for analyzing a broad class of problems involving joint production.
Article
As the global trade and market for seafood has grown, so have the twin problems of renaming and mislabeling. Resource scarcity, the potential for greater profits, and weak legislation have all encouraged incorrect labeling, the results of which include consumer losses, the subversion of eco-marketing, further degradation of fisheries resources, and even adverse effects on human health. This paper examines the extent and consequences of renaming and mislabeling seafood, the state of current legislation, and the importance of future policies, with particular attention to the US, where 80% of the seafood is imported and more than one-third of all fish are mislabeled. Policy recommendations include governments’ support for a global mandate to label species, country of origin, and catching or production method on all seafood with high penalties for infractions. Chain of custody standards, such as those recently implemented by the Marine Stewardship Council (MSC), should also be considered for adoption worldwide. To garner support for this legislation, consumers must become better acquainted and concerned with their seafood and its origins.
Article
This article presents the results of a research project, which has focussed on Danish fishers' acceptance of imposed fisheries regulations and their respect for the management system. The research has applied the analytical framework developed by Raakjær Nielsen (Mar. Policy, in press). The research has focussed on three Danish fisheries: the cod fishery in the Baltic Sea, the demersal and Nephrops fishery in Kattegat and the fishery for non-human consumption species in the North Sea. Five factors have a major impact on rule compliance in Danish fisheries: (1) the economic gains to be obtained; (2) deterrence and sanctions; (3) compatibility between regulations and fishing practises and patterns; (4) efficacy of imposed regulations; (5) norms and morals of the individual fisher. In addition, there are indications that participation of fishers in the management process stimulates rule compliance.
Article
The paper reviews and summarises the literature on regulatory enforcement in fisheries. The focus is on the theoretical literature. First, some of the main contributions from the general economic literature of law enforcement are presented, along with extensions that are considered relevant to the study of fisheries law enforcement. Second, a review of the economic literature of law enforcement applied to the study of fisheries is provided. Finally, the paper presents gaps in the fisheries economics literature on regulatory enforcement and offers some possibilities for future work.
Article
We study an individual transferable quota system with imperfect enforcement. We apply a model of individual fisherman behavior to the red shrimp (Pleuroncodes monodon) fishery in central-southern Chile. Simulation results suggest that illegal fishing could generate a 21% increase in fishing effort, resulting in a 13% increase in catch and a 2% lower quota price in comparison with the results of a system that operates under perfect compliance. The results are sensitive to changes in the level of fish abundance, total allowable catch, and the design of enforcement to induce compliance.
Article
This paper examines the effects of non-compliance on quota demands and the equilibrium quota price in an ITQ fishery. I show that whereas lower quota prices are implied unambiguously by expected penalties which are a function of the absolute violation size, the expectation of penalties based upon relative violations of quota demands can, under certain conditions, produce higher quota prices than in a compliant quota market. If there are both compliant and non-compliant firms in the fishery, the result would then be a shift in quota demand from compliant to non-compliant firms, rather than the reverse. The findings are generally applicable to quota markets in other industries, including pollution permit markets.
Article
Economic theories of managing renewable resources, such as fisheries and forestry, traditionally assume that individual harvesters are perfectly rational and thus able to compute the harvesting strategy that maximizes their discounted profits. The current paper presents an alternative approach based on bounded rationality and evolutionary mechanisms. It is assumed that individual harvesters face a choice between two harvesting strategies. The evolution of the distribution of strategies in the population is modeled through a replicator dynamics equation. The latter captures the idea that strategies yielding above average profits are demanded more than strategies yielding below average profits, so that the first type ends up accounting for a larger part in the population. From a mathematical perspective, the combination of resource and evolutionary processes leads to complex dynamics. The paper presents the existence and stability conditions for each steady-state of the system and analyzes dynamic paths to the equilibrium. In addition, effects of changes in prices are analyzed. A main result of the paper is that under certain conditions both strategies can survive in the long-run. This discussion paper has resulted in a publication in the Journal of Evolutionary Economics , 2003, 13(2), 183-200.
Article
Economic theories of managing renewable resources, such as fisheries and forestry, traditionally assume that individual harvesters are perfectly rational and thus able to compute the harvesting strategy that maximizes their discounted profits. The current paper presents an alternative approach based on bounded rationality and evolutionary mechanisms. It is assumed that individual harvesters face a choice between two harvesting strategies. The evolution of the distribution of strategies in the population is modeled through a replicator dynamics equation. The latter captures the idea that strategies yielding above average profits are demanded more than strategies yielding below average profits, so that the first type ends up accounting for a larger part in the population. From a mathematical perspective, the combination of resource and evolutionary processes leads to complex dynamics. The paper presents the existence and stability conditions for each steady-state of the system and analyzes dynamic paths to the equilibrium. In addition, effects of changes in prices are analyzed. A main result of the paper is that under certain conditions both strategies can survive in the long-run. This discussion paper has resulted in a publication in the Journal of Evolutionary Economics , 2003, 13(2), 183-200.
Article
Methods are proposed for testing stochastic dominance of any pre--specified order, with primary interest in the distributions of income. We consider consistent tests, that are similar to Kolmogorov--Smirnov tests, of the complete set of restrictions that relate to the various forms of stochastic dominance. For such tests, in the case of tests for stochastic dominance beyond first order, we propose and justify a variety of approaches to inference based on simulation and the bootstrap. We compare these approaches to one another and to alternative approaches based on multiple comparisons in the context of a Monte Carlo experiment and an empirical example. Copyright The Econometric Society 2003.
Directorate-General for Internal Policies, Policy Department B: Structural and Cohesion Policies, Fisheries
  • R Aranson
Aranson, R. 2014. "Best Practices in the use of Rights-Based Management to Reduce Discards in Mixed Fisheries." Directorate-General for Internal Policies, Policy Department B: Structural and Cohesion Policies, Fisheries, European Parliament IP/B/PECH/IC/2013-167.
A Famed Fishing Port Shudders as Its Codfather Goes to Jail
  • J Bidgood
Bidgood, J. 2018. "A Famed Fishing Port Shudders as Its Codfather Goes to Jail." https:// www.nytimes.com/2018/02/11/us/commercial-fishing-regulation-codfather.
The Last Trial of the Codfather
  • B Borrell
Borrell, B. 2017. "The Last Trial of the Codfather." https://www.hakaimagazine.com/ features/last-trial-codfather/, Hakai Magazine.
What is Haddock: Sustaninable Fish
  • Marine Council
  • Stewardship
Council, Marine Stewardship. 2020. "What is Haddock: Sustaninable Fish." https: //www.msc.org/what-you-can-do/eat-sustainable-seafood/fish-to-eat/ haddock.
Blue Harvest Inks Deal to Acquire 35 Rafael Groundfish Vessels for $25m
  • J Huffman
Huffman, J. 2019. "Blue Harvest Inks Deal to Acquire 35 Rafael Groundfish Vessels for $25m." https://www.undercurrentnews.com/2019/11/25/ blue-harvest-inks-deal-to-acquire-35-rafael-groundfish-vessels-for-25m/, Undercurrent News.
Blue Harvest Closes on Rafael's New Bedford Boats, Permits
  • K Moore
Moore, K. 2020. "Blue Harvest Closes on Rafael's New Bedford Boats, Permits." https://www.nationalfisherman.com/northeast/ blue-harvest-closes-on-rafaels-new-bedford-boats-permits/, National Fisherman.
2015 Final Report on the Performance of the Northeast Multispecies (Groundfish) Fishery
  • T Murphy
  • G Ardini
  • M Vasta
  • A Kitts
  • C Demarest
  • J Walden
  • D Caless
Murphy, T., G. Ardini, M. Vasta, A. Kitts, C. Demarest, J. Walden, and D. Caless. 2018. "2015 Final Report on the Performance of the Northeast Multispecies (Groundfish) Fishery." US Dept Commer, Northeast Fish Sci Cent Ref Doc. 18-13.