Fishing for Value (Anchovies Are Not Just for Pizza)

Profit optimization is the default criterion in recent literature on the selection of fishery catch sizes. This work contrasts the operational effects of that criterion with those of the optimization of shareholder value. The latter criterion is the valuation of the sequence of monetary payouts received by the owner of the assets used in fishing. The results in the monograph are driven by the need for working capital to bridge the delay between payment of operating costs and receipt of revenue at a later time. The assumptions are reasonably consistent with the Peruvian anchoveta fishery (the world’s largest) and have the following implications: if the interest rate on short-term loans is not too high, then working capital should be funded entirely with short-term loans; it is easy to adapt profit-driven practices and research to optimize value; and, although value-optimal escapements generally differ from profit-optimal escapements, they are the same if exogenous uncertainty does not affect the prices or unit costs of catches. Also, the work briefly considers these issues for a fishery (unlike Peruvian anchovetas) that can separately select the size of each age or size class.