An Empirical Analysis of Portfolio Management as a Tool for Implementing Ecosystem-Based Fishery Management

Many experts have argued that the traditional management of commercial fish stocks as singlespecies is short-sighted, wasteful, and ineffective. Ecosystem-based fisheries management (EBFM) now is being promoted as a potential solution to the problem. While much attention has been directed recently at the potential benefits of implementing EBFM for commercial fisheries, the realization of a more comprehensive management that takes into account the broader effects on the ecosystem and associated human communities remains elusive. Portfolio management has been suggested as a practical tool for helping to implement EBFM. The portfolio approach involves the application of financial portfolio theory to multispecies fishery management to account for species interdependencies, uncertainty, and sustainability constraints. The main objectives of the proposed research are to develop a procedure for constructing portfolio models to assist the implementation of EBFM in the northeastern region, using empirical harvest and effort data from NMFS and biological (food web) data from the literature, and to demonstrate the feasibility and usefulness of the above procedure through case studies. Results of our research will further improve our understanding of the potential for portfolio management as a practical approach
to help achieve EBFM in the northeastern region.