El Niño, Expectations, and Fishing Effort in Monterey Bay, California

This article uses vector autoregressions (VARs) and a dynamic linear rational expectations model to analyze the effects of sea surface temperatures and catch prices on fishing effort for albacore tuna, Chinook salmon, sablefish, and squid in Monterey Bay, California. The VAR results show that fluctuations in sea surface temperatures, including El Niño events, have significant effects on effort and prices for these fisheries. Estimation of the model shows that El Niño has positive effects on the abundance in Monterey Bay of albacore and negative effects on Chinook, sablefish, and squid. Testing of the model supports rational expectations by harvesters of albacore, Chinook, and sablefish but not squid. Test results also suggest that dynamic adjustment costs are not significant for albacore, Chinook, or sablefish fisheries.