Economic Value of Weather and Climate Forecasts

Case Studies: Fishery


Study Costello, C.J., Adams, R.M., and Polasky, S. (1998). The value of El Nino forecasts in the management of salmon: A stochastic dynamic assessment. American Journal of Agricultural Economics, 80, 765-777.
Structure of Decision Problem Forecast Characteristics Information Valuation
Decision: harvest, hatchery production and releases
Dynamics: yes
Time Scale: annual (and 2-yrs ahead, etc)
Predictand: El Niño
Format: categorical
Type: idealized
Quality Changes: yes
Baselines: naive (expect normal ENSO state)
VOI, imperfect: $0.435 million/year (US $)
VOI, perfect: $0.902 million/year (US $)
Risk Treatment: expected value
Comments Maximizes expected net present value (sum of consumer and producer welfare). Survival, recruitment, and weight depend on ENSO state. Quality of hypothetical imperfect forecasts is halfway between climatological and perfect information.

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