Adjusting technical efficiency to reflect discarding: The case of the U.S. Georges Bank multi-species otter trawl fishery

Discarding undesirable catch is recognized as a major problem confronting fishery managers. It is widely perceived by managers, however, that reductions in discards can only be accomplished via reductions in good or desirable outputs and technical efficiency. Yet there appear to be few studies which actually examine the relationship between discard reduction and technical efficiency. In this paper, we present an alternative concept of technical efficiency, which explicitly recognizes that measures of technical efficiency should be adjusted for discard levels. This is because traditional measures of efficiency do not consider the resources used in order to discard. We also offer a framework based on data envelopment analysis for assessing efficiency in the presence of undesirable outputs. We examine the relationship between vessel efficiency and regulatory discards in the U.S. Georges Bank multi-species otter trawl fishery on a tow-level basis. We then examine differences between efficient and inefficient tows, and extend our results to the trip level. Further examination of trip-level results then yield insights into the potential impact of trip-limit regulations. Results show that in order to reduce discards, vessels are limited in the amount they can increase their total output, and that trip-limit regulations may have unintended consequences.