Table 1. — Values of the parameters for four survival problems: the Gulf shrimp fishery. 

 Parameters Problems 



N - number of years m planning period 



Z - initial cash balance in dollars 

 o 



y - initial number of boats in fleet 



X - initial investment in dollars 

 o 



7 - annual interest rate per dollar 



T - annual production cost per vessel in dollars 



a - per vessel purchase price in dollars 



e — annual depreciation fraction per dollar invested 



C - annual income tax rate per dollar of taxable 

 income 



j3 - recoverable fraction of investment in fishing 

 capacity 



1 



.25 



.65 



.25 



.65 



.25 



.65 



.25 



.65 



3 landings per vessel were 63,291 pounds of 

 heads-off shrimp per year. 



Since the real price of shrimp — the price 

 adjusted for the purchasing power of money — 

 is highly influenced by growth in real per 

 capita income, and since it appears that the 

 economy may be entering a period of modest 

 growth (possibly much like the late 1950's), 

 the real price of shrimp was specified to reflect 

 a 1.5% rate of growth in real per capita income 

 in Problems 1, 2, and 3, and to reflect a 3.3% 

 rate of growth (as observed in the mid 1960's) 

 in Problem 4. 



To evaluate the economic attractiveness of 

 shrimp fishing versus the best alternative to 



fishing (as reflected by the interest rate on 

 money), the decisionmaker in Problem 2 initially 

 has the approximate money equivalent of an 

 investment in one vessel. Recall that the en- 

 trepreneur is a profit maximizer, given that he 

 can survive. Thus, the decisionmaker would 

 opt for the savings alternative whenever the net 

 rate of return from a dollar invested in fishing 

 capacity is less than the interest rate on money. 

 That is, the second problem indicates the eco- 

 nomic advantage (or disadvantage) of investing 

 in fishing relative to loaning the money to 

 someone else. 



Since the model takes into account the infor- 

 mation obtained through time as the values of 



115 



