Three essays on bioeconomics of renewable resources: Management regimes, water quality implications and habitat-fishery interactions in the Chesapeake Bay

Studying economic-ecological marine and coastal systems presents a unique opportunity for interdisciplinary and policy-relevant research. On the one hand, the resources involved provide numerous benefits. These benefits range from food, employment, income to people and regional development, to important ecosystem services, biodiversity and other non-market values. On the other hand, management of such systems usually involves limiting and, in many cases, competing resources. It also implies understanding of species' biology, interactions and linkages with their habitat and interactions with other species, as well as the properties of the system under consideration. My dissertation captures all the above dimensions, applying them to two ecologically and commercially important marine resources, for the largest estuary in United States, the Chesapeake Bay.;The first essay of my dissertation investigates the role of harvest sanctuaries and reserves in the management of a sedentary fishery. An optimal control bioeconomic model is developed and optimized for native oysters in the Chesapeake Bay that incorporates two positive externalities generated by oyster stocks: nutrient removal and provision of habitat for other benthic species. The model incorporates four management regimes that currently exist in the Bay: public grounds, aquaculture on leased grounds, sanctuaries that are never harvested, and reserves that are infrequently harvested for short periods. We find that if harvest effort in public grounds can be controlled, then that management regime unambiguously provides the highest social welfare. However, if harvest effort in public grounds cannot be controlled, then reserves provide the highest social welfare. Sanctuaries are part of the optimal mix of regimes only when harvest effort on public grounds cannot be controlled and a pulsed harvest is not feasible.;The second essay examines how optimal management of a fishery can contribute towards the achievement of environmental goals. An optimal control bioeconomic model is applied to oysters in public grounds in Chesapeake Bay, taking into account nitrogen removal by oyster both through harvest and denitrification. The ecological target is achievement of nitrogen Total Maximum Daily Load (TMDL) goal, which is taken to be reached primarily through Best Management Practices (BMPs) in watersheds draining to the Bay. Optimal management of harvests in the Bay reduces the cost of attaining the TMDL goal by between 4 and 6 percent. Our sensitivity analysis indicates that the cost savings in BMPs from managing oysters accounting for both denitrification and nitrogen removal through harvest are small, compared to a naive management of the stock under cheap BMPs, but become larger as the cost of BMPs increases. Between the two, denitrification is a much more important parameter to be considered in management decisions related to Bay's nitrogen TMDL target, and managing a stock taking into account that, can result in cost saving of BMPs between 5 and 8 percent.;The third essay of my dissertation investigates habitat-fisheries interaction between two important resources in the Chesapeake Bay: blue crabs and Submerged Aquatic Vegetation (SAV). A habitat can be essential to a species (the species is driven to extinction without it), facultative (more habitat means more of the species, but species can exist at some level without any of the habitat) or irrelevant (more habitat is not associated with more of the species). An empirical bioeconomic model that nests the essential-habitat model into its facultative-habitat counterpart is estimated. Two alternative approaches are used to test whether SAV matters for the crab stock. Our results indicate that, if we do not have perfect information on habitat-fisheries linkages, the right approach would be to run the more general facultative-habitat model instead of the essential-habitat one. Failure to do so can result in model misspecification and biased estimates of the impact of habitat on species productivity. With our data we fail to reject the null hypothesis that SAV is irrelevant for crabs in the Bay.;My dissertation work provides a significant contribution to the research area dealing with reduced water quality due to cultural eutrophication and stock decline of keystone species in the Chesapeake Bay, the implications of spatially explicit management systems and quantification of habitat-fisheries interactions, thus helping to set the stage for more involved and cohesive research in these areas.