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Muse, Ben. 1990. "An Experimental Forecast of the 1990 Entry Permit Value for the Southern Southeast Black Cod
Longline Fishery". CFEC Report Number 90-3. Alaska Commercial Fisheries Entry Commission. March, 1990. 3 pp.
Abstract:
This paper describes the use of an econometric model of Alaska limited entry permit prices to forecast the
average price of the Southern Southeast Inside Sablefish Longline permits in 1990. The basic model was estimated using
data from several limited salmon and herring fisheries for which time series data on permit prices are available. The model
attempts to "explain" a permit's value in the current year using season length, adjusted average gross earnings in the
fishery for each of the previous three seasons, and crew size as explanatory variables.
The model produced a price forecast for 1990 of about $27,000 when average gross revenues from 1987 to
1989 were based upon the actual number of permits "fished" in those years. When these explanatory variables were
changed to reflect what average gross earnings would have been had the fishery been reduced to maximum numbers, a
price forecast of about $63,000 was obtained.
This method of forecasting permit prices is a new and experimental procedure. The paper includes a discussion of
some potential problems.