Price formation and geographic market integration: An empirical investigation of Adriatic small pelagic species

Identification of an appropriate geographic scope is a major issue for defining fishery management plans. The geographic size of a fishery management plan involves two factors: the interaction between fleets fishing shared stocks, and spatial market integration. While the former issue receives considerable attention (both in the literature and at a political level), not as much attention is given to the latter subject. This study aims to provide a theoretical and empirical contribution to assessing the most appropriate target area for policy intervention. Aside from the protection and recovery of overexploited stocks, if management plans intend to influence long-run and seasonal price levels, the geographical scope, where price–quantity relationships are determined, cannot be ignored. Similarly, regulations with temporal application, such as fishing activity interruption, meet biological needs but do not necessarily attain market objectives. Results of an empirical investigation of the most important Italian fish stocks, European anchovies (Engraulis encrasicolus) and sardines (Sardina pilchardus) show that the Adriatic basin can be considered a suitable area for the application of management plans both from a biological and an economic perspective.