THE VALUE OF EL-NINO FORECASTS IN THE MANAGEMENT OF SALMON - A STOCHASTIC DYNAMIC ASSESSMENT

The El Nino-Southern Oscillation (ENSO) is the largest source of inter annual variability in global climate. Variability in climate has been linked to variability in fisheries, specifically salmon stocks of the Pacific Northwest. The ability to forecast El Nino events already exis ts and is likely to improve in coming years. An accurate prediction ma y have value because it allows for better management decisions. In thi s article, we develop a bioeconomic model of the coho salmon fishery a nd derive the value of information from improved El Nino forecasting a bility. We find that a perfect El Nino forecast results in an annual w elfare gain of approximately $1 million, while imperfect forecasts lea d to smaller gains. Results also suggest that optimal management in th e face of uncertainty involves a ''conservative'' management strategy, resulting in lower harvest, higher wild fish escapement, and lower ha tchery releases than management in the absence of such uncertainty.