The Demand for Relaying by the Louisiana Oyster Industry

Transcription

1 The Demand for Relayng by he Lousana Oyser Indusry IIFET 000 Proceedngs Assane Dagne and Waler R. Kehly, Jr* Lousana Deparmen of Wldlfe and Fsheres *Coasal Fsheres Insue-Lousana Sae Unversy Absrac. Oyser relayng s one of he means by whch oysermen ncrease he ne reurn from her leases. Usng a Posson regresson model, hs research evaluaes he facors affecng he demand for relayng perms by he oyser ndusry n Lousana, he naon s leadng oyser producng sae. Economc facors and prevalng envronmenal condons were found o sgnfcanly nfluence he number of perms demanded. Keywords: Oysers, Relayng, Posson regresson, Lousana. 1. INTRODUCTION 1 ha may be harvesed only f hey are relayed or depuraed before drec markeng. The condonally resrced Molluscan shellfsh are known vecors of nfecous and classfcaon refers o growng waers ha do no mee he somemes dangerous dseases. Human consumpon of crera for resrced waers f subjeced o nermen hese shellfsh producs can pose a subsanal rsk o he mcrobologcal polluon, bu may be harvesed f shellfsh consumng publc because molluscan shellfsh are ofen are subjeced o a suable purfcaon process. The eaen raw or parally cooked. In an effor o proec publc prohbed classfcaon refers o growng waers from healh, he coasal (esuarne) waers are surveyed whch shellfsh may no be harvesed for markeng under accordng o gudelnes esablshed by he Naonal any condons. Classfed U.S. esuarne shellfsh growng Shellfsh Sanaon Program (NSSP). The surveys, whch waers for 1974 and 1995, expressed n housands of acres, monor fecal colform couns, cover 4,30 ndvdual are presened n Table 1. shellfsh growng areas n he 1 coasal saes. The purpose of surveyng s o classfy he waers, agan accordng o he gudelnes esablshed by he NSSP, for harvesng purposes. The shellfsh growng areas are classfed as approved for harves or as one of four harveslmed caegores: (1) condonally approved, () resrced, (3) condonally resrced, or (4) prohbed. The approved classfcaon refers o growng waers from whch shellfsh may be harvesed for drec markeng (.e., fecal colform levels are below some prescrbed amoun). The condonally approved classfcaon refers o growng waers ha mee approved classfcaon sandards under predcable condons (e.g., he rver sage above some level wll rgger he closure of shellfsh grounds). The resrced classfcaon refers o shellfsh growng waers 1 Much of he Inroducon reles heavly on he publcaons by Naonal Oceanc and Amospherc Admnsraon (1998) and he Uned Saes Deparmen of Commerce (1997). The Naonal Shellfsh Sanaon Program s a cooperave and volunary allance beween saes, he U.S. Food and Drug Admnsraon, and he shellfsh ndusry. a Table 1:U.S. Shellfsh Esuarne Waers Classfcaon a Trends, 1974 and 1995 (1,000 acres). Year % Change Classfcaon Approved 10,560 14, Condonally 387 1, Approved Resrced 34,106 large Condonally na Resrced Prohbed 3,811, Toal Harves 4,3 6, Lmed Does no nclude classfcaons of offshore growng areas and/or unclassfed waers. Source: U.S.D.O.C. (1997)

2 IIFET 000 Proceedngs As ndcaed, shellfsh growng waers approved for harves To acheve he goal noed above, he nex secon of he expanded from abou 10.6 mllon acres n 1974 o 14.9 paper provdes a bref overvew of Lousana s oyser mllon acres n 1995; an ncrease of almos 40%. Harves ndusry and relayng acves. Then, he model developed lmed acreage durng he same perod ncreased almos for esmaon purposes s presened along wh he relevan 60%; from 4. mllon acres o 6.7 mllon acres. sascs used n he analyss. The emprcal resuls and Resrced and condonally resrced acreage accouned relaed dscusson are presened n he las secon of he 3 for one-hrd of he oal harvesed lmed acreage n paper. Increased relayng acves from condonal and resrced waers s ofen advocaed (and pracced) as a means of enhancng shellfsh producon n he coasal U.S. saes and n many oher counres. Relayng acves can be.louisiana S OYSTER INDUSTRY AND RELAYING ACTIVITIES caegorzed by ype of waer boom. Frs, n he case of publcly owned waer booms, relayng acves nvolvng he movemen of shellfsh from resrced publc grounds o.1 Lousana s Oyser Indusry approved publc grounds can be pracced (e.g., Florda has pracced hs procedure). Second, n he case of mxed Lousana s generally he hghes oyser producng sae n publc and prvae ownershp of waer booms, relayng he Uned Saes. Is landngs end o fall n he 8-1 acves nvolvng he movemen of shellfsh from mllon pound range hough landngs n excess of 13 resrced publc grounds o approved prvae grounds (.e., mllon pounds are no uncommon (Fgure 1). leased grounds) can be pracced. Fnally, f prvae ownershp of waer booms s prevalen, relayng acves can enal movemen of shellfsh from leases n resrced waers o leases n approved waers Mllon Pounds Prvae Publc Snce abou one-hrd of he U.S. shellfsh harvesed lmed acreage s classfed as resrced, here appears o be consderable poenal for enhancng shellfsh producon and economc reurns va ncreased relayng acves. 4 Despe hs poenal, economc analyss of he ssue s sparse (see Easley, 198, and Ajuze and Alobello, 1997 for wo excepons, largely based on heorecal consderaons). The goal of hs paper s o conrbue o he economc body of leraure on hs subjec by emprcally esmang wheher relayng acves are movaed by economc facors and, f so, o wha exen. The analyss s based on he lease-based ndusry n Lousana and covers he perod. Specfcally, economc and envronmenal facors nfluencng relayng from leases n resrced waers o leases n approved waers are examned. 3 No all saes use all classfcaons and he use of he resrced classfcaon was used by only a few saes n I s noeworhy ha he fracons of acreage approved for harves vares subsanally by regon. Along he Alanc coas, for nsance, more han 80% of all shellfsh growng areas are approved for harves. Less han one-half of he acreage n he Gulf of Mexco and Wes Coas regons, however, are approved for harves Fgure 1: Prvae and Publc Oyser Producon n Lousana Lousana s oyser fshery s prmarly a lease-based ndusry. Abou 400 housand acres are currenly under lease (compared o less han 50 housand acres durng he md-1970's and early 1980's) and producon from hese prvae leases has averaged abou egh mllon pounds annually snce he md-1970's. Overall, he relave longrun sably n producon from hese leases (see Fgure 1) n conjuncon wh he ncreasng acreage suggess ha he average producvy per acre leased has fallen sharply durng he pas wo decades. 5 In addon o he prvae grounds (.e., leased acreage), Lousana also manans consderable acreage devoed o publc seed grounds and oyser seed ground reservaons. 5 See Kehly e al. (199) for a dealed dscusson of he legslaon whch enables leasng acves n Lousana.

3 IIFET 000 Proceedngs These publc seed grounds, whch end o be furher 8 one-half mllon acres were classfed as prohbed. Whle offshore han leases, nclude he mos producve naural sascs peranng o classfed leased acreage are no reef area eas of he Msssspp Rver and encompass some readly avalable, here s evdence ha approxmaely 40% 896 housand acres n oal (Perre e al., 1991). These of leased acreage s classfed as condonal or resrced publc seed grounds are open from approxmaely seven (see Whrock, 1999 for deals). monhs each year (Sepember hrough he followng March) and serve wo purposes o he commercal oyser harvesers.. Relayng Acves Frs, hey provde a source of seed oyser ha can be ransplaned by lessees o her ndvdual leases for harves In order o relay oysers n Lousana, one mus frs apply 6 a a laer dae. Second, marke szed oysers harvesed for and receve a perm from he Lousana Deparmen of from he publc grounds (.e., hree nches or more) can be Healh and Hospals. The cos of he perm s nomnal, markeed drecly wh no nermedae ransplanng approxmaely $50, bu he applcan s also requred o pos requremens. a secury bond of $5,000 whch s reurned f no volaons are deeced durng he relayng process. In general, he Producon of marke oysers from he publc seed grounds perms are vald for a wo week perod. has averaged jus over hree mllon pounds annually snce 1977, or a lle more han a hrd of he average annual Two ypes of relayng acves are pracced n he sae of harves derved from he prvae leases. Snce 1993, Lousana. The frs s generally referred o as an however, marke oyser producon from he publc grounds expermenal or conrolled relay. Relays of hs naure are has averaged well over fve mllon pounds annually. The conduced only nfrequenly. The second ype of relayng ncreased producon from he publc grounds n recen acvy, whch serves as he focus of hs paper, s referred years reflecs wo facors. Frs, envronmenal condons o as he regular relay. Ths enals he movemen of have been favorable for oyser growh on publc grounds n oysers from a leases n condonal or resrced waers o 7 recen years. Second, a major resoraon effor, enalng he dverson of fresh waer from he Msssspp Rver o he welands eas of he Msssspp Rver (he Caernarvon Dverson Projec), was compleed n he early 1990's. The operaon of hs dverson srucure has, s repored, sgnfcanly resored he sae s mos producve seed grounds by reducng salny condons on hese grounds. 9 leases n approved waers. As ndcaed n Fgure, perms ssued for regular relayng acves were conssenly less han 40 per year from 1976 unl he md- 1980's. The number of perms ssued hen advanced rapdly, peakng a over 100 n Begnnng n 1988, he number fell sharply, hough a moderae ncrease was observed agan n Lousana, whch accouns for almos one-ffh of he naon s oal esuarne shellfsh growng waers, has a very large percenage of harves lmed acreage. Accordng o he 1995 Naonal Shellfsh Regser, a oal of.1 mllon acres of Lousana esuarne waers (boh publc and prvae grounds) were classfed as approved. More han one mllon acres were classfed as resrced whle more han 6 The general rule of humb s ha for every sack of seed oyser bedded, he lessee can ancpae he harves of 1. markeable sacks of oysers whn he nex sx o nne monhs. 7 Oyser growh on he publc seed grounds ends o be relaed o salny condons. In we years, when salny condons are low, growh of oysers wll be hgh on he publc grounds due o less dsease (dermo) and less predaon. Much of he 1990's can be consdered as we. Whle consderable more deal s gven n he followng secons of he paper as o he reasons for he observed 8 The oal acreage repored here exceeds, by a large facor, he oal amoun of publc and prvae acreage repored elsewhere n he paper. Ths reflecs he fac ha nonproducng waer booms (.e., waer booms ha are no naural reefs or leases) are ncluded n he Naonal Shellfsh Regser sascs. 9 Concevably, hs ype of relayng could also enal he relayng of oysers from leases n condonal or resrced waers o oher leases n condonal or resrced waers. One would expec mnmal, f any, acves of hs naure because would hen requre addonal relayng acves before he oysers could be markeed. 10 In some nsances, connuaons for use of an ssued perm were requesed and approved. These connuaons are no ncluded n he analyss. 3

4 annual varaon n number of regular perms ssued, some general observaons are presened here. Frs, he deflaed prce of he harvesed produc advanced rapdly durng he perod bu fell sharply n 1991 and has snce remaned well below ha observed durng he md- 1980's o 1990 perod (see Fgure ). One would hypohesze, ceers parbus, ha ncreases n he deflaed prce of he harvesed produc would resul n ncreased Number of Perms 10 Perm Prce Prce ($/lb) where: max ( NPV ) = ( P * Q ( q) C ( Q)) ( 1 + r ) = 1 IIFET 000 Proceedngs relayng acves. NPV = ne presen value of reurns from oyser leasng acves; Fgure. Oyser Relayng Perms and Deflaed Prce A second observaon regardng he number of perms ssued reflecs he sharp declne begnnng n 1988 even hough he deflaed prce connued o ncrease hrough In 1988, he Lousana Deparmen of Healh and Hospals naed a requremen ha a secury agen be on board any vessel relayng oysers from pollued o approved waers. Gven he fac ha hs requremen would add addonal expenses o relayng operaons, one would hypohesze ha resuled n he number of perm applcaons, ceers parbus. A cursory examnaon of he daa suggess hs o be he case. 3. MODELING CONSIDERATIONS AND DATA 3.1 Theorecal Consderaons Oyser leases are an asse whch are acqured for he purpose of producng marke oysers. As such, an oyser lease s no dfferen han, say, agrculural propery where he land s an asse used n he producon of a crop. The mpled goal herefore s he maxmzaon of he dscouned sream of reurns generaed from employmen of hs propery (owned or leased) over an nfne me horzon, or: P = (1) he oupu prce of he harvesed lease-based oyser produc n me perod ; Q = he quany of oyser oupu from lease-based acves n me perod whch n urn s a funcon of he qualy (q) of he asse; C = r = cos of producon n me perod whch s a funcon of oupu Q (q); dscoun facor; The ne presen value of reurns,.e., he dscouned profs, are, as ndcaed, relaed o he oupu prce (P ), he oupu quany (Q ) whch n urn s relaed o he qualy of he asse (q), coss of producon (C ) and he dscoun facor (r). As specfed, an ncrease n he oupu prce or quany wll resul n an ncrease n he ne presen value of reurns. Conversely, an ncrease n coss for a gven level of producon (due o, say, an ncrease n npu coss) or an ncrease n he dscoun facor wll resul n a decrease n he ne presen value of reurns. 11 In general, demand for relayng acves can be consdered as a derved demand for a facor of producon (see Layard and Walers, 1978 for deals). As such, demand for relayng acves wll be drecly relaed o he ably of hese relayng acves o enhance he ne presen value of reurns from oyser farmng acves. The mplcaons of hs are mulfaceed. Frs, mples ha he demand for relayng acves wll ncrease (decrease) n relaon o an ncrease (decrease) n he oupu prce (P ), ceers parbus. Second, mples ha he demand for relayng wll be posve only o he exen ha wll acheve a shor-run or possbly long-run ncrease n he oupu from lease-based acves (Q ). A shor-run ncrease n oupu may be acheved f he relayed oysers are removed shorly afer beng placed on he approved lease(s). To he exen, 4 11 An nfne me horzon s assumed for dscusson purposes. The analyss could be changed, whou loss of generaly, o allow for he sale of propery afer a fxed number of me perods.

5 IIFET 000 Proceedngs however, ha relayng acves provde aachmen maeral (.e., he oyser shell and he lvng communy of oysers and he assocaed fauna of an oyser reef envronmen), hese acves can enhance he long-run producvy of a gven lease. The quany of oyser oupu from lease-based acves (Q ), as specfed n equaon 1, s a funcon of qualy. Envronmenal facors, such as he salny regme, can affec annual, or even long-run qualy of a lease. The derved demand for relayng acves as a funcon of lease qualy s, o a large exen, unknown. For example, low poenal producon on approved acreage n a gven year due o, say, an unsuable salny regme, may also ndcae ha poenal producvy of leased acreage n condonal or resrced waers s also low. Under hs scenaro, here would be lle benefs from relayng snce here would be lle produc o relay. A hrd mplcaon, based on he calculaon of ne presen values as presened n equaon 1, s ha an ncrease n relayng coss wll resul n a reducon n he derved demand for relayng acves, ceers parbus. Specfcally, an ncrease n relayng coss resul n an ncrease n overall harvesng cos, denoed as C (Q). Ths s nuve n ha as relayng coss ncrease, becomes less lkely ha he lease holder wll acheve a posve reurn on hs nvesmen from relayng acves. Whle one generally hnks of coss n erms of npus o he producon process (e.g., fuel, crew, repars, ec.), here are oher coss ha should also be consdered. One of he mos relevan of hese oher coss s ha of opporuny coss. One alernave o relayng s ha of ransplanng from he publc seed grounds. As such, f he avalably of oysers (seed and marke) on he publc grounds s hgh, he need o relay from pollued o approved leases s dmnshed. As such, he demand for relayng should, n heory, be nversely relaed o avalably on he publc seed grounds, ceers parbus. Fnally, he ssue of overall marke supply needs o be consdered. Hgh volume sales, afer conrollng for prce and envronmenal facors, may sugges readly avalable markes as opposed o lmed markes whereby quoas may be mposed by ndvdual dealers on he fshermen. The hgh volume sales assocaed wh avalable markes may necessae he need for alernave supply sources by he lease holders. If he leaseholders are no able o secure he needed supply from her leases n approved waers or from he publc seed grounds, hey may urn o relayng as one mehod o secure he addonal supply. Ths s of parcular relevance when envronmenal condons lm avalably on leases n approved waers or on he publc seed grounds. 3. Concepual Model Based on he above dscusson, demand for oyser relayng acves n Lousana s specfed as follows: Perm = + *Prce + *Acres + *Cos + *Aval + 5*Salny + 6*Publc + 7*Prvae + u () where: Perm = number of perms ssued n year ; Prce = deflaed Lousana docksde oyser prce n year (n $/lb. of mea); Cos = dscree varable ndcang wheher secury agen s requred (zero before 1988; one hereafer); Acres = acres of waer booms leased for he culvaon of oysers n year (n housand acres); Aval = ndcaor of marke oyser avalably on publc -1 oyser grounds n year -1 (n mllon sacks); Salny= welands acreage wh salny >10 pp (n mllon acres); Publc = producon of oyser meas from publc grounds n year (mllon pounds of mea); Prvae = producon of oyser meas from prvae grounds n year (mllon pounds of mea);,.. = parameers o be esmaed; 0, 1 7 u = error erm. The model, as gven n equaon, ncludes seven exogenous varables. The raonale for ncludng he deflaed prce (prce ) has been esablshed. Gven ha he demand for relayng acves s hypoheszed o be posvely (negavely) relaed o an ncrease (decrease) n prce, he sgn assocaed wh s ancpaed o be 1 posve. Coss, as dscussed above, are also consdered o nfluence he demand for relayng acves. Whle a me-seres daabase peranng o harvesng and relayng coss does no exs, one cos facor, n parcular, s hypoheszed o nfluence he demand for relayng perms. Specfcally, begnnng n 1988, a requremen ha a secury agen be onboard he vessel when relayng acves are occurrng was enaced. Ths requremen s hough o sgnfcanly ncrease overall relayng coss. To accoun for hs 5

6 ncreased cos, a dscree varable (Cos ), equal o zero before 1988 and one hereafer, was ncluded n he model. Gven ha he demand for relayng s hypoheszed o be negavely relaed o ncreased coss, he sgn assocaed wh s ancpaed o be negave. Acreage under lease (Acres ) s ncluded n he model o accoun for he long-run change n qualy of he average oyser lease. As prevously noed, whle he amoun of waer-booms beng leased has ncreased subsanally durng he perod of analyss, he long-run oyser producon on prvae leases has remaned sable, ndcang a subsanal declne n he average producon per acre. Ths reducon n per acre producvy s hypoheszed o be due, n par, o less desrable waer-booms beng leased over me. Specfcally, one would expec he more suable oyser growng areas o be leased nally. Remanng waer-booms subsequenly leased are, herefore, of lower 1 qualy on average. Thus, he greaer he number of acres leased, he hgher he proporon of less desrable or margnal leases. Relayng, whch consues one of he means of mprovng he producvy of hese margnal leases, s hence hypoheszed o be posvely relaed o he number of acres leased. I follows ha one would ancpae ha s posve. 6 IIFET 000 Proceedngs Hence, s hypoheszed ha he sgn assocaed wh he coeffcen 4 s less han zero. The ndcaor of oyser avalably on leased grounds was he esmaed amoun of weland acreage hroughou coasal Lousana ha had a salny regme of en pars per housand or more n Aprl 15 of each year; expressed n mllons of acres. Fnally, varables represenng annual producon from publc grounds (Publc ) and prvae leases (Prvae ) were ncluded n he analyss. As prevously dscussed, hgh levels of sales, afer conrollng for prce and envronmenal facors, may sugges ncreased markeng opporunes. Hgh volume sales, n urn, may ndcae a need o secure addonal sources of produc from nonradonal sources. One of hese sources s ha of relayng oysers from pollued o approved waers. Hence, he expeced sgns assocaed wh boh 6 and 7 are hypoheszed o be posve. Daa relave o he number of perms ssued annually were obaned from he Lousana Deparmen of Healh and Hospals. All addonal daa were provded by he 3 Lousana Deparmen of Wldlfe and Fsheres. Summary sascs for he varables used n hs sudy are provded n Indcaors of oyser avalably on publc grounds n year Table. -1 (Aval -1) and on prvae leases (Salny) n year were also ncluded as explanaory varables n he analyss. The Overall he number of relayng perms ssued per year ndcaor of avalably on he publc seed grounds ncluded boh seed oyser and marke oyser and was based on square meer samples conduced by he Lousana Deparmen of Wldlfe and Fsheres n Augus of each year. I s saed n erms of oal esmaed sacks (.e., combned seed and marke oyser sacks) avalable on he publc seed grounds 13 (n mllons). As esmaed avalably of seed and marke oyser on publc seed grounds ncreases, here should, n heory, be less of a need o relay from condonal or resrced waer-booms o leases n approved waers Whle hs s he case, on average, here are ceranly excepons. Due o welands eroson and subsdence, for example, many hsorcally producve areas are now lkely o be of lle value n erms of her ably o produce sgnfcan quanes of oysers. 13 Only he daa for he publc seed grounds eas of he Msssspp Rver (.e., Breon Sound seed grounds) was used n he analyss. 14 As ndcaed, he ndcaor of avalably on publc seed grounds was lagged by one perod n he analyss. Ths 3.3 Daa (Perm ) averaged 1 and ranged from zero n several years (prmarly afer 199) o The sandard devaon assocaed wh ssued perms equaled 8. The deflaed prce per pound of he harvesed produc (Prce ) averaged $.11 for he -year perod endng n 1998 wh a range from $1.57 o $3.46. Overall, a sharp declne n he deflaed prce, whch can be arbued o Vbro vulnfcus based mandaory warnng labels and assocaed negave publcy, was observed afer 1990 (see Kehly and Dop for dscusson of he mpacs of Vbro vulnfcus on he Gulf of Mexco docksde oyser prce). reflecs he fac ha he survey aken o esmae avalably s conduced n Augus of each year and harvesng acves for eher seed or sack producon s permed from abou Sepember hrough he followng March. Hence, s he esmae of avalably from me perod -1 ha wll largely nfluence relayng acves n me perod. 15 I s generally beleved ha an exended salny regme of less han fve pp. resuls n hgh moraly raes. The daa requred o consruc a varable usng he fve pp. crera, however, was no avalable for he curren sudy.

7 IIFET 000 Proceedngs Table : Summary Sascs Varable Mean Sd Dev Perm Prce Acres Aval Salny Publc Prvae Annual oyser producon from leased acreage (Prvae ), whch averaged egh mllon pounds annually durng , exhbed a range from abou fve mllon pounds o almos 11 mllon pounds. Annual producon from he publc seed grounds (Publc), by comparson, averaged only 3.1 mllon ponds and ranged from less han one mllon pounds o almos seven mllon pounds. Acres leased for he purpose of growng oysers averaged abou 300 housand annually durng he perod of analyss and ranged from 13 housand o almos 400 housand. In general, leased acreage ncreased monooncally durng he perod of sudy. Fnally, acres of welands wh a salny level n excess of 10 pars per housand (.e., an ndcaor of oyser avalably on prvae leased grounds) ranged from onehalf mllon o.8 mllon and averaged abou 1.5 mllon. By comparson, he ndcaor of oyser avalably on he publc seed grounds (.e., esmaed number of seed and marke sacks based on square meer samples) ranged from almos no sacks (prmarly n he early 1990's) o almos fve mllon sacks (occurrng n he md-1990's). 3.4 Sascal Consderaons In he model specfed n equaon, he dependen varable,.e., he number of relayng perms ssued annually, akes only non-negave neger values. Under hese condons, he Posson regresson model, n leu of ordnary leas squares, s he approprae modelng approach. Dealed presenaons of he Posson regresson model can be found n Greene (1993;1998) and Long (1997). The bref presenaon of he Posson regresson model provded below draws from Greene (1993).The Posson regresson model can be wren as: λ λ y e Pr ob( Y = y) = ;lnλ = x β y! [ ] E y x x wh y = 0,1,,3...; y and x are he dependen varable and he explanaory facors used, respecvely. Margnal effecs are gven by: = λβ [ β ] ln L = λ + y x ln y! R P χ = 1 λ = ( y ) λ χ ( y y*) / y * (3) (4) The correspondng log lkelhood funcon o maxmze s: Goodness of f sascs such as he Pearson $ can be used o derve R measures. The Pearson $ and he Pearsonbased R p are gven n equaons (6) and (7), respecvely. where y* s he maxmum lkelhood esmaor for. 4. RESULTS AND DISCUSSION 4.1 Resuls The model was esmaed by maxmum lkelhood usng Lmdep verson 7.0. (Greene, 1998). The Cameron-Trved (1990) es performed dd no ndcae he presence of (5) (6) (7) 7

8 IIFET 000 Proceedngs 16 overdsperson. Posson esmaon resuls are presened n Table 3. Resuls nclude parameer esmaes, margnal effecs,correspondng sandard errors and goodness of f measures. Table 3: Posson Esmaon Resuls Varable Esmae Margnal Effec (Sd Error) (Sd Error) Consan -.597* (0.749) Prce * 3.3* (0.187) (6.5) Acres ** 0.14 (0.003) (0.10) Cos * -3.8* (0.07) (7.) Aval * -1.8* (0.156) (5.4) Salny 0.396* 8.3** (0.115) (4.01) Publc 0.9* 6.1* (0.058) (.0) Prvae 0.110**.3 (0.048) (1.6) Log Lkelhood = -66.9; R = 94.1% p *sascally sgnfcan a he 0.01 level; **sascally sgnfcan a he 0.05 level. As suggesed by he lkelhood rao es performed (calculaed LR$ =618.7 wh 7 degrees of freedom), he Posson model s sgnfcan a he 0.01 level. The Pearsonbased R p ndcaes ha 94.1 percen of he varaon observed n he number of relayng perms ssued annually s explaned by he regresson model proposed. All parameer esmaes are sascally sgnfcan and conform o heorecal expecaons wh respec o parameer sgn. Gven he fac ha no prevous research has been conduced n hs area, he magnude of he curren parameer esmaes canno be compared wh For dealed presenaons of dsperson ess 16 for Posson regresson models, see Dean and Lawless (1989) and Cameron and Trved (1990). resuls from prevous research exercses o asceran conformy across research sudes. A one dollar ncrease (decrease) n he deflaed docksde prce of he harvesed produc n year was found o resul n an ncrease (decrease) n 3 perms demanded. The resuls also ndcae ha he requremen of a secury agen onboard he vessel when relayng acves are occurrng (Cos) sgnfcanly nfluences he overall level of relayng acves. Specfcally, he secury agen requremen resuled n a reducon n he number of perms demanded by 33, ceers parbus. Acres of waer booms leased by he sae for he culvaon of oysers (Acres ) was also found o nfluence he demand for relayng acves. Overall, he resuls sugges ha each addonal housand acres aken for he purpose of culvang oysers resuls n an ncrease n perms demanded. Leased acreage durng he perod of analyss, as prevously noed, advanced from 13 housand o 398 housand, or by 185 housand. Holdng all oher facors consan (and a her mean value), hs mples a oal ncrease n demand equvalen o 6 perms. An ncrease (decrease) n esmaed avalably of seed and sack oysers on he publc grounds (Aval -1) was found o sgnfcanly reduce (ncrease) he demand for relayng acves n he curren year. Overall, each addonal mllon sacks of seed or marke oysers was found o resul n a reducon n relayng demand equvalen o almos perms, ceers parbus. The ndcaor of oyser avalably on prvae grounds (Salny) was also found o be sascally sgnfcan and ncreased avalably on he prvae grounds was found o negavely nfluence he demand for relayng acves, ceers parbus. The resuls sugges ha a one mllon pound ncrease n marke oyser producon from publc seed grounds (Publc ) resuls n an ncrease n demand of 6 perms whle an equvalen ncrease n producon from prvae leases (Prvae ) resuls n an ncrease n demand for only perms. The large dfference beween hese wo esmaes may reflec he fac ha when marke producon from publc grounds s large, me allocaed for ransplanng seed oyser from he publc beds o he prvae leases s dmnshed. As a resul, he need o relay from resrced leases o approved leases durng ha poron of he year ha he publc seed grounds are closed s enhanced. 4. Dscusson Overall, he resuls suppor he hypohess ha economc and envronmenal facors largely deermne he demand for relayng acves. Specfcally, he analyss helps o explan he observed rend n Lousana s relayng acves 8

9 over he pas wo decades. Increased relay acves durng he early-o-md 1980's reflecs wo prmary facors. Frs, he deflaed docksde prce of he harvesed produc ncreased subsanally durng he me frame. Second, abundance on he publc seed grounds was exremely low due o he drough condons n he sae a he me. Conversely, he declne n relayng acves durng much of he 1990's reflec reflecs several facors. Frs, he requred secury agen aboard he vessel negavely mpaced he demand for perms. Second, he sharp fall n he deflaed prce of he harvesed produc furher reduced he demand for perms. Fnally, esmaed abundance of oysers on he publc grounds was abnormally hgh whch dampened he demand for perms by and even greaer exen. Whle conrollng envronmenal facors ha nfluence relayng acves s, by and large, ousde he conrol of managemen agences, developmen of opons o conrol economc facors, parcularly coss, may be feasble. Conrollng coss wll, under opmal condons, encourage ncreased relayng acves. IIFET 000 Proceedngs Through relayng, oysermen can ncrease he revenues drawn from her prvae leases. Ths sudy evaluaed he man facors nfluencng he demand for relayng perms n Lousana. The Posson regresson model proposed suggesed ha economc and envronmenal facors sgnfcanly affec he number of relayng perms demanded. Sgnfcan economc facors ncluded oyser prces, publc and prvae producon levels. Salny condons and oyser avalably on publc waer booms were denfed as sgnfcan envronmenal facors. Whle he demand for perms s currenly very lmed n Lousana, fuure prce ncreases and changes n he favorable oyser growng condons prevalng n he sae may resul n ncreased demand for relayng perms. The research repored heren resuled from he Coasal Economy Sraegy Developmen Projec, conduced by Lousana Sea Gran and parally funded by he U.S. Fnally, Lousana s shellfsh suaon relave o ha n Economc Developmen Admnsraon, May some of he oher saes warrans dscusson. Relayng s no commonly pracced n Lousana, as noed, lkely due, a leas n par, o he exremely large amoun of growng waers avalable n he sae. In oher saes, suable growng waers are less abundan and, hence, dependence on relayng and oher shellfsh-producon enhancemen 5. SUMMARY AND CONCLUSIONS 6. ACKNOWLEDGMENTS 7. REFERENCES Ajuze, E. I. S. and M. A. Alobello. Propery Rghs and acves are of hgher relevance. As noed n a recen Polluon: Ther Implcaons for Long Island repor (NOAA, 1998) []he presence of shellfsh growng Sound and he Oyser Indusry. Revew of waers suable for harves does no necessarly correlae Agrculural Economcs 19():4-51, wh he quany of shellfsh landngs. For example, n 1995, he sae of Lousana had almos 14 mes as much Easley, J. R. Jr. Propery Rghs n Shellfsh Relayng: classfed acreage as dd he sae of Washngon. Ye, Managng Fsheres for Hgher Economc Reurns. hrough nensve aquaculure, shellfshermen n Norh Amercan Journal of Fsheres Managemen Washngon landed 3 pounds of oysers per acre, whle 4: , 198. compared o four pounds per acre n Lousana. Hence, whle relayng acves n Lousana may no conrbue Cameron, A. and P. Trved. Regresson Based Tess for sgnfcanly o producon due o favorable shellfsh- Overdsperson n he Posson Regresson Model. growng condons n he sae, relayng may be of Journal of Economercs 46: , consderably greaer mporance n oher, less 17 envronmenally conducve, saes. Dean C., and J.F. Lawless. Tess for Overdsperson n Posson Regresson Models. Journal of he Amercan Sascal Assocaon 84(406):467-47, Greene, W.H., Lmdep Economerc Sofware. Verson 7.0, Ajuze and Alobello (1997) sugges ha abou 17 80% of Conneccu s markeed oysers are derved from relayng acves. In hs suaon, however, relayng nvolves he movemen of oysers from publc o prvae grounds. Greene, W.H. Economerc Analyss. Second edon. Macmllan Publshng Company, Kehly, W. R., K. J. Robers, and D. Brannan.Oyser Lease 9

10 IIFET 000 Proceedngs Transfers and Lendng: Roles n Rehablaon of Lousana s Oyser Indusry. Journal of Shellfsh Research 11(1):15-131, 199. Kehly, W.R., and H. Dop The Demand for Gulf of Mexco Oysers n he Presence of Vbro vulnfcus. Unpublshed manuscrp, 000. Perre, W. S., R. J. Dugas, and M. F. Chary. Lousana Oyser: Enhancng he Resource Through Shell Planng. World Aquaculure (4):4-45, Layard, P. R. G., and A. A. Walers. Mcroeconomc Theory. McGraw-Hll Book Company, New York, New York, Long. J.S. Regresson Models for Caegorcal and Lmed Dependen Varables. Advanced Quanave Technques n he Socal Scences, Vol 7. Sage Publcaons. Thousand Oaks London, New Delh Naonal Oceanc and Amospherc Admnsraon (NOAA)(on lne). Classfed Shellfsh Growng Waers. By C. E. Alexander. NOAA s Sae of he Coas Repor, Slver Sprng, MD, U.S. Deparmen of Commerce (USDOC). The 1995 Naonal Shellfsh Regser of Classfed Growng Waers. Offce of Ocean Resources Conservaon and Assessmen, Naonal Ocean Servce, Naonal Oceanc and Amospherc Admnsraon. Slver Sprng, Maryland,1997. Whrock, F. C. A Spaal Analyss of Lousana Oyser Closure Lnes. Unpublshed Masers Thess, Lousana Sae Unversy pp. 96,