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The Relative Importance of Luck and Technical Efficiency in a Fishery

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  • Álvarez, Antonio
  • Pérez, Levi
  • Schmidt, Peter

Abstract

The study of productive efficiency has not been a traditional field of research in fisheries economics. However, recent papers have dealt with testing what it is known as “the good captain hypothesis”, according to which differences in catches among vessels can be explained in terms of skipper skill (efficiency). These papers introduce an interesting research issue: the distinction between luck and efficiency. In this paper we try to shed more light on this topic using a panel dataset on the hake fishery in Northern Spain. In particular, we are interested in separating efficiency not only from luck but also from other time invariant variables, such as vessel characteristics, which sometimes are confounded with efficiency. In contrast to the other papers that deal with this topic, we find that luck is more important than technical efficiency in explaining catches. We argue this can be explained by the fact that other papers use data at a higher level of temporal aggregation. Over longer periods of time, skill persists while luck averages away.

Suggested Citation

  • Álvarez, Antonio & Pérez, Levi & Schmidt, Peter, 2003. "The Relative Importance of Luck and Technical Efficiency in a Fishery," Efficiency Series Papers 2003/03, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    • Handle: RePEc:oeg:wpaper:2003/03
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    References listed on IDEAS

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    Cited by:

    1. Álvarez, Antonio, 2001. "Some Issues on the Estimation of Technical Efficiency in Fisheries," Efficiency Series Papers 2001/02, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).

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