Growth Accounting and Productivity in the Norwegian
Fisheries 1961-2004
Rögnvaldur Hannesson
Norges Handelshøyskole
Bergen, Norway
Motivation
• Fish production depends on an unpriced, natural resource
• How important is the resource for productivity?– Does cpue depend on stock size?
• Are productivity gains dissipated by open access or lax management?
• Is technical progress normal in the fisheries despite small productivity gains?
0
20000
40000
60000
80000
100000
1950 1960 1970 1980 1990 2000
Fis
her
men
0
2000
4000
6000
8000
10000
12000
14000
Cat
ch v
alu
e (M
ill.
200
5-kr
on
er)
Fishermen Catch value
Norway’s fisheries 1950 - 2005
0
50
100
150
200
250
1961
1965
1969
1973
1977
1981
1985
1989
1993
1997
2001
Capital
Labor
Catches
Stocks
Not so evident what explains changes inproduction
Index of fish stock abundance, using sharein landed alue 1986-2004 as weights:• ”New” stocks appeared over time,representing additions to resource base
0
50
100
150
200
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
Resource base fluctuates, but was about the same in 2004 as in 1961
Thick line: average
, , ,t it it it it iti
V PY K L S t /i i
it iti
it iti
dP dYY P
dV dt dt dtV P Y
i it i it i it iititit
i it it iti
it it it iti i
Y dK Y dL Y dS YdY PPK dt L dt S dt tdt
P Y P Y
it i it i it i itiitit
i it it iti
it it it iti i
dY Y dK Y dL Y dSY PPdt K dt L dt S dtt
P Y P Y
Total factor (3-factor) productivity
Profit maximization under competition: valueof marginal productivity = factor prices
1itit it
it
YP k R
K
1it
it itit
YP k W
L
k cost of intermediateinputs, equal for all stocks
1
ln ln
it it itit t titit t ti iti
it it it it t it iti i i
it i itit
i itKt t Lt t
it iti
dY Y dSY dK dLPP R Wdt S dtt dt dtP Y P Y k P Y
dY Y dSP
dt S dts d K s d L
P Y
s’s: shares of labor and capital in value added
, , bY F K L t SlnY dS d S
bYS dt dt
ln ln ln ln lnit it it t tit it it i Kt Lt
i i i
Y d Y d S d K d Ls s s b s s
t dt dt dt dt
Change in 3-factor productivity:
lnln 3 ln 2 itit i
i
d Sd TFP d TFPs b
dt dt dt
Some of the apparent change in 2-factorproductivity due to changes in stocks?
si share of stock i in value of landings
0
1000
2000
3000
4000
5000
6000
1963
1966
1969
1972
1975
1978
1981
'000
200
0-kr
on
er
Labor Capital
0
1000
2000
3000
4000
5000
1991
1993
1995
1997
1999
2001
'000
200
0-kr
on
er
Labor Capital
Share of labor and capital in value added
0
0.2
0.4
0.6
0.8
1
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
Labor Capital
Share of labor and capital in value added
0
0.2
0.4
0.6
0.8
1
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
Labor Capital
High variability of K and L shares. Capital remuneration imputed;variations in landings value absorbed by labour.Use fixed weights for labor (0.7) and capital (0.3)
What about b in Sb?
Three cases:(i)b = 1 (the Schaefer funtion)(ii)b = 0.5(iii)b = 1 (bottom-dwelling stocks) & 0.1
(stocks near surface)
Changes in productvityAnnualized change in TFP2: 0.8%
0 01
1 1T
T
T tt
TFP TFP g TFP g
-0.3-0.2-0.1
00.10.20.30.40.50.60.7
19
61
19
64
19
67
19
70
19
73
19
76
19
79
19
82
19
85
19
88
19
91
19
94
19
97
20
00
20
03
TPF2
TPF3
Growth in TFP3:Annualized growth:
4.3% (b = 1)1.7% (b = 1 or 0.1)
-0.4-0.3-0.2-0.1
00.10.20.30.40.50.6
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
b = 1
b = 0.5
b = 1 or 0.1
TFP has grown faster if the influence of stocks is accounted for (2-4% per year)TFP growth in the market-oriented sectorof the Norwegian economy 1970-2003: 2.1% per year
a) b = 1b) b = 0.5c) b = 1 or 0.1
0
100
200
300
400
500
600
700
8001
96
1
19
65
19
69
19
73
19
77
19
81
19
85
19
89
19
93
19
97
20
01
TFP2
TFP3a
TFP3b
TFP3c