How to improve the management of renewable resources: The case of Canada'snorthern cod fishery

The paper examines how an easy-to-apply optimal Feedback rule can be used t o solve for optimal levels of exploitation of a renewable resource. Using d ata from Canada's northern cod fishery, the optimal feedback rule is used t o derive optimal levels of exploitation for the years 1962-91 under differe nt discount rates. alternative model specifications, and parameter assumpti ons. The optimal feedback rule indicates that over much of the period the f ishery was economically overexploited and, given the stock development that actually took place, a harvesting moratorium should have been instituted t hree veers earlier than when it was introduced. The results show how the us e of a simple and flexible optimal rule by managers of renewable resources can generate substantial gains.