My tuna paper for the upcoming EAERE conference

My paper for the upcoming EAERE conference (PDF here) deals with certification of a fishery that is practically unmanaged. Usually you should steer clear of such fisheries as they tend to be heavily overfished, but what if a bit of consumer power can still nudge fishing effort from bad practices to slightly less bad practices?

This is a contentious issue. The Marine Stewardship Council simply does not certify a fishery if it has no plausible management plan. This is understandable, because before you label a fishery 'sustainable' you should check whether it has any mechanism to prevent future overfishing. It's the classical problem of open-access resources: if users cannot be excluded from harvesting, it will be a free-for-all, at the future's peril. So we need some institution that does the excluding.

But now take a look at the Western Pacific tuna fishery. It may not be completely open-access, but given the sheer size of the area (I'm talking half the largest ocean on the planet here) and the number of sovereign states involved, it comes pretty close to a free-for-all. Some of the tuna species (skipjack) are hardly affected, but they are caught in ways that affect other species (yellowfin) that are doing less well (although, admittedly, not as disastrously as some others). Some fishers use Fish Aggregation Devices (FADs), which attract schools of skipjack as well as juvenile yellowfin; their catch tends to end up in your sandwich as canned tuna. Other fishers do not use FADs but look for free-swimming schools of tuna. These fishers can select schools consisting purely of skipjack or yellowfin, which enables them to avoid catching juvenile yellowfin. There are good economic reasons to leave juvenile yellowfin in the sea: just compare the price of a tuna steak to that of canned tuna. So we want less tuna from FADs, and perhaps more from free-swimming schools.

But this is where it gets tricky. We could tell consumers to stop buying tuna from FADs, and lure them towards the tuna from free-swimming schools by using some sort of 'FAD-free tuna label' (if you can find the space besides MSC, dolphin-friendly, FOS, RFS, Grüne Punkt, Fair Trade, and all the other labels out there). But remember this is an open-access fishery, so the free-swimming schools are very likely to be as overfished as other schools. If we could simply shift consumer demand from FAD tuna to FAD-free tuna that would be good, but there is a risk that the FAD-free tuna label also boosts overall demand for tuna. After all, the label may attract tuna-conscious consumers who feel they can now finally buy tuna without feeling guilty. And enhancing overall demand may make matters worse rather than better. This is a major concern with certification in general, but so far I haven't come across anyone looking at this problem for tuna.

I wrote this paper with Martin Quaas of Kiel University. I'm very happy to work on this issue with him: he works on many fisheries problems, and he has ample experience in the type of microeconomic modelling that we apply here. It's a huge problem, with many facets, and I feel we have so far only scratched the surface of it. We (not Martin, but me and my colleagues at Wageningen University) further explore the issue in the BESTTuna project, but then in a much more applied and detailed manner. BESTTuna is huge, with partners all over the Western and Central Pacific and about 12 PhD students from the same region. This paper is just me and a German professor covering the same issue in a handful of equations. But such simplified analyses can yield insights that more detailed studies don't.

Wise words from the Bird

Originally I planned to include in my PhD thesis the following quote:

Learn all that stuff and then forget it.

At the time I thought it was Miles Davis who said that, but it might as well have been Charlie Parker (sorry Miles, Bird makes for a better blog post title). I'm not really into jazz: the quote tricked me into looking up some Miles Davis and Charlie Parker on Spotify but after a few songs I always decide to turn on Pelican instead. The closest to jazz that I listen to frequently is the Tom Waits. I absolutely love Tom Waits. Oh, and Ethiopians like Mulatu Astatke or Getatchew Mekuria, but only when I'm in the mood.

But this quote - wow, I could tattoo it on my forehead if I were into that kind of thing (don't worry, I'm not). It defines how I view the theories I work with, as well as the musical traditions I play. I consider myself a mainstream economist, but I do have my question marks regarding the behavioral and ethical models applied in my field. I don't think there is any meaningful way of measuring existence value, if it exists at all. I don't believe economic valuation can capture moral or religious considerations. I appreciate the role that social norms, traditions, or downright stupidity can play in human behavior. But I also think that it is too easy to throw your hands in the air and declare the entire body of neoclassical economics as overly abstract nonsense, or worse, to refuse to learn microeconomics because economists did not predict the latest financial crisis.

The bottom line is that you can only criticize a theory if you fully understand it. By the same token, you can only renew a musical tradition if you master its techniques, its rhythms, its harmonies, and its social context. Miles and Bird could only invent and develop bebop because they understood what came before it. Likewise, if you want better economics, well, make sure that you first understand the orthodoxy.

On the other hand, there is also the "forget it" part. Don't let the tradition hinder your creativity. Dare to break its rules, to explore its boundaries. Dare to question a theory's hidden assumptions, don't accept such excuses as "this is how we have always done it." Know the rules, but don't obey them.

The quote, by the way, never made it into my thesis. My professor thought it cynical, as if I recommended the reader to forget all I wrote. I didn't agree, of course, but I also figured that if he interpreted the quote like that, so would many others. So I left it out. I still regret that decision.