Technical efficiency in the Swedish trawl fishery for Norway lobster

Abstract

Reducing fleet capacity in European fisheries is an important objective of the European Union's Common Fisheries Policy. The success of such programmes depends both on the variation and the level of efficiency within the fishing fleets. If vessels with significantly lower than average efficiency levels are decommissioned, the actual reduction in fishing capacity will be less than expected. Further, if the remaining vessels are not operating at an efficient level after a decommissioning program, future improvement in efficiency may even further offset the effects of the decommissioning program. This paper examines the level and determinants of technical efficiency for a sample of Swedish demersal trawlers, which mainly target Norway lobster but also shrimp and demersal fish, in 1995. The data on per-trip gross revenues, fishing effort, gear choice, month of fishing and vessel attributes are analyzed using a translog stochastic production frontier, including a model for vessel-specific technical inefficiencies. Output elasticities and returns to scale are also examined. The technical inefficiency effects are found to be highly significant in explaining the levels and variation in vessel revenues. The mean efficiency for the sample vessels is estimated to be 66%. The inefficiency model indicates that efficiency decreases with total annual effort, and the same applies with vessel size in Gross Registered Tonnage. Further, it is found that older vessels are less efficient.