OWERS: INCOME ESTIMATES AND RETURNS IN SALMON FISHERIES 



other method of determining future benefits. The 

 problem with this approach is that it involves 

 making implicit assumptions about the worth of 

 the operator's own contribution of labor and man- 

 agement and deducting this as an expense. As an 

 approximation of permit value, it was assumed 

 that the permit value would equal 2 years' net 

 earnings for those remaining in the fishery, but 

 further research is needed to determine actual 

 values and the relationship between price and 

 productivity. A preliminary survey of permit val- 

 ues after 6 mo of limited entry indicates permits 

 may not be worth as much as the values used here 

 (Anonymous 1975). Using the above relationship 

 in Equation (3), however, the permit value will 

 increase as the number of permits is reduced and 

 capital costs per boat will rise. 



Outside Earnings 



Outside earnings come principally from two 

 sources: earnings in other fisheries and earnings 

 from nonfishing employment. Information on av- 

 erage earnings from outside employment for a 

 randomly selected sample of gear operators who 

 fished in 1971 and 1972 was provided by the Inter- 

 nal Revenue Service in a format which did not 

 disclose individual identities (Anonymous 7 ). 



Data on earnings from other fisheries were ex- 

 trapolated from fish price data, landing statistics, 

 and by survey. It was assumed in the analysis that 

 outside earnings in other fisheries would not be 

 affected by limited entry and would remain con- 

 stant, except in those instances where other 

 fisheries produced a net loss. In those cases it was 

 assumed that a fisherman would break even in 

 other fisheries and the value of net earnings from 

 other fisheries would be zero. 



No data have been collected to determine how 

 much gear operators may have earned as crew- 

 members in other fisheries, but it is not likely that 

 this is a substantial amount since a fisherman 

 responsible for a vessel in one fishery is most likely 

 the operator in other fisheries as well. No reliable 

 data has been collected on incomes of spouses, 

 investment earnings, transfer payments, and pen- 

 sions, so no estimates were included. 



Fraction of Permits Issued 

 That Are Used 



Because there is no requirement that a fisher- 

 man use his entry permit every fishing season, it 

 can be expected that not all outstanding permits 

 will be fished. 



In the analysis, the fraction of gear licenses sold 

 to gear licenses fished during the period from 1969 

 to 1972 was taken as the fraction of entry permits 

 that would be used. It will be important to monitor 

 actual rates of participation from year to year to 

 establish more meaningful figures. 



Examples of Estimates 



Using the equations and input data discussed 

 above, tables similar to that shown in Table 2 for 

 the southeast Alaska purse seine fishery were 

 prepared for all those salmon fisheries which had 

 entry limited in 1974. In each fishery, returns 

 were first calculated using the present number of 

 entry permits issued in that fishery. Returns were 

 then calculated for a hypothetical reduction in the 

 number of outstanding permits by 5% increments 

 of the total number issued. No calculations were 

 prepared for greater than a 45% reduction in per- 

 mits because many of the assumptions discussed 

 above would probably no longer prove correct. 

 Table 3 shows the four estimates of returns with 

 the present number of entry permits in each of the 

 fisheries considered. 



OPERATING UNITS NECESSARY TO 

 ACHIEVE REASONABLE RETURNS 



Once expected returns with various numbers of 



TABLE 2. — Expected returns in the southeast purse seine fishery 

 with the present number of entry permits and reductions in the 

 number by 5% increments. No estimates have been made for 

 greater than a 45% reduction in the number of entry permits. 

 Similar data was prepared for all those fisheries which had entry 

 limited in 1974. 



'Anonymous. 1975. Data collection and analysis necessary to 

 limit entry in Alaska's salmon fisheries. U.S. Dep. Commer., 

 NOAA, Natl. Mar. Fish. Serv., contract 03-4-208-262, Juneau, 

 75 p. 



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