AgriFood-WP 2015:4

A Trip to Reach the Target? – The Labor Supply of Swedish Baltic Cod Fishermen

Fishing offers a unique opportunity to investigate the relationship between income and labor supply. The variation of working hours, depending on the length of a fishing trip, and variation in income, depending on the catch, is high compared to other occupations. This variation is an advantage for researchers but also poses a challenge to fishermen. One way to handle the issue of highly variable income might be to set specific revenue targets, i.e. to stop fishing when a certain revenue level has been reached. This means that if revenues are higher than expected at some stage of a fishing trip fishermen are more likely to return to port as they would reach their target income earlier.

In this paper, the revenue target hypothesis is investigated using the case of Swedish Baltic Sea cod trawlers. Trip-specific revenue targets as well as weekly revenue targets are used. The results do not support the idea of revenue targets since the evidence show that cod fishermen, on average, choose to continue fishing if revenues are higher than expected. This suggests that fishermen are, on average, risk seeking.