Date of Award

Summer 8-16-2019

Level of Access

Open-Access Thesis

Degree Name

Master of Science in Economics (MSECO)

Department

Economics

Advisor

Keith S. Evans

Second Committee Member

Xuan Chen

Third Committee Member

Caroline L. Noblet

Additional Committee Members

Andrew Crawley

Abstract

Maine has a long and proud history of working waterfronts and commercial fishing. However, in recent decades, aquaculture, or the harvesting or growing of aquatic life, has emerged as another player in the coastal economy. Globally, aquaculture is experiencing the fastest growth of any food sector in the world as it subsidizes floundering wild-capture fisheries (FAO, 2014). Maine and the rest of the United States have not yet participated in this growth, which has led stakeholders and policymakers like the National Oceanic and Atmospheric Administration (NOAA) to advocate for massive improvements to the sector by 2020 (NOAA, 2016). To ensure the possibility of sustainable growth, it is critical that the economic and social impediments are well understood. This thesis addresses two very different issues facing the aquaculture industry in Maine as it seeks to expand: the need for aquaculture growers to subsidize their income with off-farm labor and differences in community acceptance of aquaculture.

Chapter 2 examines the proclivity of oyster growers in New England to participate in off-farm labor. Off-farm labor is considered to be an important risk-hedging strategy, especially in an industry where crop insurance is not yet available. Data is collected from a 2016 mixed-mode survey conducted by the University of Maine’s School of Economics across all oyster growers in Maine and Massachusetts (Scuderi & Chen, 2017). We explore how the growers’ personal, social, and business characteristics influence the likelihood of participating more or less in off-farm income generating activities. In addition, we borrow from a broad literature of agricultural off-farm labor supply studies to develop a framework for analyzing the off-farm labor decision specifically for aquaculture-based industries. The results indicate that a grower’s age, education, gender, business size, and experience all play an important role in determining participation in income generating activities on and off-farm. We also find that learning and information sharing within the aquaculture industry can decrease off-farm labor participation. These results can offer insights for policymakers by providing information about what grower characteristics influence their ability to work on-farm.

Chapter 3 looks to examine community-level differences in acceptance of aquaculture across three coastal regions: Casco Bay, Damariscotta River region, and Penobscot Bay. Each region’s economy is composed of many stakeholder groups who hold heterogenous preferences over aquaculture. These groups compete for limited coastal space such that changes in the coastal landscape can change the distribution of winners and losers. We build off the work of Evans et al. (2017) that uses hedonic price analysis to look at the impacts of small changes in aquaculture production on the coastal landscape. This work is extended by acknowledging that some policymakers and stakeholders are interested in growing Maine’s aquaculture production in a nonmarginal fashion, a problem that requires a new set of tools to fully understand. A pure-characteristics equilibrium sorting model is utilized to investigate how observed large-scale changes in marine aquaculture might impact housing markets. A dataset composed of all coastal household transactions between 2012 and 2014 is used to investigate how coastal homeowners perceive aquaculture. Results show that relative changes in community price are induced when the utilization of coastal space changes. However, these results are muddied by an endogenous relationship between aquaculture and commercial fishing activities.

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