Abstract
The real net investment in fishing vessels in the Gulf of Mexico shrimp fishery is analysed employing an econometric model. The model is simulated over a 17-year period to examine the short and intermediate run impacts of changes in such policy variables as the real rate of interest, cost of equity capital, investment tax credit and income tax on investment behavior in fishing vessels. It is further used to provide a forecast over a 5-year period (1978 - 1982) for real net investment in fishing vessels. The investment behavior of wooden, steel and fiberglass vessels is also compared. Specifically, the productivity and responsiveness to changes in policy variables for each vessel type are examined. Finally, the social welfare implications of overcapitalization in fishing vessels are discussed. There can be little doubt that investment tax credit stimulates investment expenditure in the Gulf shrimp fishery. However, income tax exerts the greatest influence on investment decisions in the fishing industry. Fishermen's investment responses to changes in the real rate of interest and cost of equity capital are quite modest in the short run. However, they exert substantial influence in the intermediate run.Steel vessels are by far the most productive in the Gulf shrimp fishery. As a consequence, they have increased in proportion relative to wooden and fiberglass vessels. Investment responses to changes in policy variables are greatest for steel vessels and least for wooden. Fiberglass vessels fall somewhere in between as far as productivity and responsiveness to policy changes are concerned. The Treasury depreciates fishing vessels over an 8-year service life for tax purposes. The findings from this study are in line with this rule but fail to identify an optimal service life. Based on their productivities, steel vessels tend to perform very well even as they age. The real stock of both steel and wooden vessels are expected to show continuous growth from 1978 through 1982. However, the stock of steel vessels is likely to grow about three times as fast as wooden ones over this period.
Tettey, Ernest O. (1983). The Gulf of Mexico shrimp fishery : an econometric analysis of real net investment in fishing vessels. Texas A&M University. Texas A&M University. Libraries. Available electronically from
https : / /hdl .handle .net /1969 .1 /DISSERTATIONS -550391.