On the (ir)relevance of rates of return measures of economic performance to small boats

A common measure of the economic performance of different fleet segments in fisheries is the rate of return on capital. However, in the English Channe l, observed changes in the fleet structure are at odds with expectations gi ven the observed rates of return on capital. This disjunction between expec ted and observed behaviour raises the question as to the appropriateness of rate of return on capital as a measure of economic performance for small b oats whose main input is often non-wage labour. In this paper, an alternati ve performance indicator is developed based on returns on owner-operator la bour. This indicator appears to be of more relevance to small scale boats t han the traditional returns on capital, and a better indicator of the direc tion of adjustment in the fishery. (C) 2000 Elsevier Science B.V. All right s reserved.