AGNELLO and DONNELLEY: INTERACTION OF FORCES 



Its habitat is the intermediate sahnity waters of 

 the seacoast's intertidal zone and of inland rivers 

 and bays. Water current, temperature, and 

 biological productivity, in addition to salinity, are 

 determinants of the resource productivity of a 

 given parcel of subaqueous land. 



The property right structure characterizing 

 oyster grounds varies widely among states. Courts 

 have granted rights to subaqueous land to the 

 people of each state for their own common use. 

 State legislatures exercise these rights. The 

 federal government has been granted the right to 

 a 3-mile coastal zone and Congress in turn has 

 ceded back to the states land and resource use 

 rights within this zone."" States have responded in 

 similar ways to the exercise of their rights to the 

 oyster resource. In general, natural oyster beds 

 have been set aside as a common fishery for state 

 residents,*^ whereas other submerged land parcels 

 are available for private leasing. However, great 

 variation among the states exists in the proportion 

 of area and quality of land set aside for public or 

 common use versus private use depending on how 

 broadly administrators define the term "natural 

 oyster bed."^ An examination of the proportion of 

 oyster catch by weight on private grounds to total 

 catch by state reveals ratios ranging from a 

 maximum of 1 to for certain states in recent 

 years. Within the Middle Atlantic region the two 

 states with property rights in Delaware Bay (i.e., 

 Delaware and New Jersey) can be characterized as 

 essentially private property states, whereas 

 Maryland and Virginia, which share the 

 Chesapeake Bay, have significantly lower private 

 to total catch ratios.** 



Private property rights in oystering tend to 

 promote efficiency in several ways. First, exclusive 

 user rights provide incentives for firms to pursue a 

 policy of investing in cultch and maintaining it at 



^See Power (1970) for a detailed description of court decisions 

 involving rights to submerged land. 



'Legislative codes usually prohibit nonresidents from entering 

 the industry. See Power (1970:216-223) for a discussion of the 

 constitutionality of these restrictions. 



'Maryland, for example, classifies a natural bed as one such 

 that the natural growth of oysters ". . . is of such abundance that 

 during the preceding five years the public has resorted to them 

 for livelihood," Power (1970:220). Courts reportedly view one in- 

 dividual declaration of one day's work in a 5 yr period as sufficient 

 evidence of the existence of a natural bed. Most states employ a 

 less restrictive definition for a natural bed. 



'It is useful to note that private property rights may be in- 

 stitutionally arranged in a multitude of ways. The usual manner 

 of leasing subaqueous lands to a relatively few individuals is by 

 no means the only way of introducing private property, and in 

 fact is often objected to as prejudicial to individual freedom. A 

 more acceptable arrangement pointed out by a reviewer may be 

 for states to assume control of beds and issue permits to harvest 

 a given quantity of oysters. 



a desired level as influenced by market conditions. 

 Second, congestion and overexploitation of the 

 oyster resource is unlikely to occur since there is no 

 pressing need to harvest quickly so as to not lose 

 the resource's benefits. Finally, a communal 

 property structure tends to lower efficiency by 

 requiring the use of obsolete technology in order to 

 prevent depletion of the resource stock. Inefficient 

 technology often takes the form of obsolete capital 

 regulated into use by legislative codes. In general, 

 states relying on common property right struc- 

 tures tend to impose greater restrictions on the 

 use of capital than private property states.^ 



Between 1947 and 1968 the annual U.S. domestic 

 oyster harvest declined from 63.1 to 55.6 million 

 pounds. Imports increased from an insignificant 

 111 thousand pounds to 15.5 million pounds during 

 the same years. Accounting for inventory changes, 

 total consumption of oyster meat consequently 

 expanded by 8.2 million pounds. Concurrently, 

 both ex-vessel and wholesale prices rose. Between 

 1950 and 1968 ex-vessel prices rose 38% and 

 wholesale prices rose 89%."* 



Significant regional differences in oyster catch 

 trends characterize the post-World War II period. 

 In general, the Gulf region has increased its land- 

 ings while landings in the Middle Atlantic region 

 (defined to include the states of New York, New 

 Jersey, Delaware, Maryland, and Virginia) have 

 declined by 45%. Delaware and New Jersey har- 

 vests especially have fallen dramatically, no doubt 

 in large part due to disease which affected stocks 

 beginning in 1958. It is during this period of both 

 relative and absolute decline that we shall es- 

 timate the underlying factors explaining changes 

 in quantities and prices for the Middle Atlantic 

 oyster industry. ' 



MODEL 



Economic variables such as prices and quantities 

 are generally explained by economists through the 

 use of supply and demand models. Prices and 

 quantities are determined through the equilibra- 

 tion of supply and demand forces which incor- 

 porate the effects of various predetermined 



'For example, in the predominantely common property right 

 state of Maryland power dredging is prohibited in the harvest of 

 oysters. Consequently any dredging takes place through the use 

 of sail-powered craft called skipjacks, the newest of which is 

 around 50 yr old. 



"All data presented in this section are from Fhherij Statistics 

 of the United States, Bureau of Commercial Fisheries. National 

 retail price data are not readily available. 



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