Fishery Economics: Understanding the Bio-economic Model and Sustainable Yields

Fish are a renewable resource – but only if we harvest them wisely. Every year, millions of tonnes of fish are pulled from oceans, rivers, and lakes. The critical question for both ecologists and economists is: how much can we take without pushing fish populations toward collapse? This is where fishery economics steps in, and at its core lies the bio-economic model – a framework that merges biology and economics to guide sustainable harvesting decisions.

What is maximum sustainable yield (MSY)? 🔗

The concept of maximum sustainable yield is foundational to fishery management. In simple terms, MSY is the largest average catch that can be harvested from a fish stock indefinitely, without causing long-term decline in the population. It works because fish populations exhibit density-dependent growth – when population size drops below the environment’s carrying capacity, the remaining fish reproduce faster because there’s less competition for food and space.

Think of it this way: a fish population that is very small produces few offspring overall because there aren’t many breeding adults. A population at its maximum carrying capacity also grows slowly because resources are stretched thin. Somewhere in the middle – typically at about half the carrying capacity – the population grows at its fastest rate. This midpoint is precisely where MSY occurs.

Mathematically, fish population growth is often described using the logistic growth function. The net change in biomass over time equals the intrinsic growth rate multiplied by the current biomass, adjusted by how close the population is to the carrying capacity. When harvesting removes exactly as many fish as the population naturally produces, the stock remains stable. At MSY, this natural production is at its peak, meaning we are extracting the maximum possible without depleting the stock.

Limitations of relying solely on MSY 🔗

While MSY sounds like the perfect management target, it has serious shortcomings. The concept is purely biological – it tells us the maximum tonnage of fish we can catch, but it says nothing about the cost of catching them or the economic value of the harvest. As the FAO notes, MSY corresponds to the maximum natural growth of the stock but ignores the costs of fishing and the value of the catch.

Additionally, MSY assumes stable environmental conditions, constant reproductive rates, and a single-species focus. In reality, ocean ecosystems are complex, interconnected, and constantly changing. Managing a fishery at exactly MSY is risky because even small errors in estimation can push the stock into overfishing territory. This is why many experts advocate fishing somewhat below MSY to provide a safety margin.

The bio-economic perspective of fisheries 🔗

Recognising that biology alone cannot determine the best harvesting strategy, economists developed the bio-economic model. This approach integrates three critical variables: the natural growth function of the fish population, the current population size (biomass), and the economic resources used for harvesting (fishing effort and associated costs).

The pioneering work in this field came from H. Scott Gordon (1954) and Milner B. Schaefer (1957), whose combined contributions formed what is now called the Gordon-Schaefer bio-economic model. Gordon introduced the concept of economic overfishing in open-access fisheries, while Schaefer provided the biological dynamics foundation with his surplus production model. Together, their work showed that the purely biological optimum (MSY) does not necessarily coincide with the economic optimum.

The key elements of this model include: a biomass growth function that represents the biology of the fish stock, a harvest function that links biology to economic activity, and a profit function that captures the economic dimension. By combining these elements, the bio-economic model can evaluate not just how many fish can be caught, but how many should be caught to maximise economic returns while maintaining sustainability.

The fishery production function 🔗

At the heart of fishery economics lies the production function, which defines the relationship between the harvest (H), fishing effort (E), and the fish population size or biomass (B). This is expressed as:

H = f(B, E)

More specifically, Schaefer defined the catch rate as Y(t) = qf(t)B(t), where q is the catchability coefficient representing the fraction of the population caught by one unit of effort. This formulation reveals two important relationships.

First, for a given population size, higher fishing effort yields a larger harvest. If the fish stock remains constant and you send more boats out, you catch more fish. Second, for a given effort level, a larger population yields a larger catch. More fish in the water means each boat catches more per trip. The catch per unit effort (CPUE) therefore serves as a relative index of population abundance – when CPUE declines, it typically signals that the stock is shrinking.

These relationships also mean that fishing effort and population size are inversely related. As effort increases over time, it draws down the fish population. A smaller population, in turn, reduces the catch per unit of effort, requiring even more effort to maintain the same harvest level – a vicious cycle that can lead to overexploitation.

Steady-state bio-economic equilibrium 🔗

A steady-state equilibrium in fishery economics occurs when the amount of fish harvested is exactly offset by the natural growth of the population. In this state, the population size remains constant over time. Algebraically, this is represented as:

ΔB_t/Δt = g(B_t) – H_t = 0

This means the change in biomass equals zero – growth equals harvest. This concept is fundamental to sustainable fishery management because when the population is at equilibrium, losses from fishing mortality are compensated by population increases from growth and recruitment.

Three critical equilibrium points 🔗

The Gordon-Schaefer model identifies three key reference points on the bio-economic landscape, each corresponding to a different management objective.

Maximum Sustainable Yield (MSY): This is the biological optimum – the highest tonnage of fish that can be sustainably harvested. The fishing effort at MSY (f_MSY) corresponds to the peak of the sustainable yield curve.

Maximum Economic Yield (MEY): This is the economic optimum – the harvest level that maximises the difference between total revenue and total cost. Since catching more fish beyond a certain point costs more than the additional revenue it generates, MEY is essentially MSY adjusted to account for the value of the fish caught and the cost of catching it. The effort at MEY (f_MEY) is always lower than at MSY, meaning the economic optimum requires less fishing effort and maintains a larger fish stock.

Bioeconomic Equilibrium (BE): This is what happens under open access – where anyone can fish without restriction. Fishers keep entering the fishery as long as revenues exceed costs. At the open-access equilibrium, total revenue equals total cost, and economic profit drops to zero. The fishing effort at BE (f_BE) exceeds both f_MSY and f_MEY, resulting in a depleted stock and wasted economic potential. In fact, the Gordon-Schaefer model predicts that the fishing effort at bioeconomic equilibrium is twice the effort at MEY.

The sustainable yield curve 🔗

The sustainable yield curve is one of the most important graphical tools in fishery economics. It expresses the natural growth of the fish population – and therefore the harvestable surplus – as a function of fishing effort. The curve takes the shape of an inverted parabola.

Each point on this curve represents an equilibrium: a specific level of fishing effort paired with a corresponding population size that can sustain that level of harvest indefinitely. The equilibrium yield increases with fishing effort up to the point of MSY, and then falls as effort increases further. This is because beyond MSY, the population has been reduced to a level where its natural growth rate can no longer keep up with the harvest.

Effort and population: an inverse relationship 🔗

A crucial insight from the sustainable yield curve is that effort and population size are inversely related. Low fishing effort corresponds to a large, healthy population with modest yields (because few fish are being removed). As effort increases, the population shrinks but yields rise – up to the MSY point. Beyond MSY, further increases in effort continue to shrink the population, but now yields also fall because the stock is too depleted to regenerate quickly enough.

This creates a dangerous dynamic. In an unregulated fishery, declining catches often prompt fishers to increase their effort – more boats, longer hours, better gear – which only accelerates the population decline. As economists have observed, in open-access fisheries, declining yields cause fishers to increase effort to maintain profits, which pushes the fishery toward collapse.

The risk of extinction 🔗

If harvesting consistently exceeds the natural growth rate – that is, if the catch remains above MSY levels – the population will decline continuously. Under the logistic model, harvesting a constant number of individuals above MSY will drive the population toward extinction. This is not merely a theoretical concern. Numerous real-world fisheries have collapsed due to sustained overharvesting, from the North Atlantic cod to the Peruvian anchoveta.

The bio-economic model does offer one reassurance: under its standard assumptions, complete extinction through economic activity alone is unlikely. This is because as the fish population declines, fishing becomes increasingly unprofitable. At some point, the cost of catching the last fish exceeds its market value, and fishers exit the industry. However, this safety mechanism has limits – it may not hold if fish prices are very high (as with bluefin tuna), if fishing technology is extremely efficient, or if government subsidies artificially lower the cost of fishing.

Why the bio-economic model matters for policy 🔗

The bio-economic model gives policymakers a structured way to evaluate trade-offs. Should the goal be maximum biological output (MSY), maximum economic return (MEY), or maximum social benefit? Each objective implies a different level of fishing effort and a different stock size.

Most modern fisheries management frameworks, including those embedded in the U.S. Magnuson-Stevens Act and the UN Convention on the Law of the Sea, use MSY-based reference points. However, there is growing recognition that targeting MEY – which requires less effort and maintains larger stocks – may be more prudent. A 2025 study in Communications Earth & Environment found that managing overfished stocks at MSY levels could increase global fish yields by 10.6 megatons, equivalent to about 12% of total catches.

The challenge is implementation. Open-access conditions, weak enforcement, and government subsidies that artificially reduce fishing costs all push fisheries past their sustainable limits. Tools like total allowable catches (TACs), individual transferable quotas (ITQs), and marine protected areas are all rooted in the economic logic of the bio-economic model – they attempt to constrain fishing effort to levels that sustain both the fish stock and the economic health of fishing communities.

Key takeaways 🔗

The bio-economic model of fisheries brings together population biology and economics into a single analytical framework. MSY identifies the biological ceiling for sustainable harvesting but ignores costs and economic incentives. MEY identifies the harvest level that generates the greatest economic surplus, typically at a lower effort level than MSY. And the open-access bioeconomic equilibrium demonstrates the inevitable outcome of unrestricted fishing: depleted stocks, zero profits, and wasted potential. The sustainable yield curve, shaped like an inverted parabola, visually captures these dynamics and reveals the inverse relationship between fishing effort and population size. Understanding these concepts is not just an academic exercise – it is the foundation for designing fishery policies that can keep our oceans productive for generations to come.

What do you think? If targeting MSY is risky and MEY generates better economic returns with less fishing, why do you think most global fisheries are still managed closer to – or beyond – MSY? And in a world where fish stocks are shared across national boundaries, how can bio-economic principles be applied fairly between countries with very different economic needs?

References

1. https://en.wikipedia.org/wiki/Maximum_sustainable_yield
2. https://www.fao.org/4/w6914e/w6914e02.htm
3. https://www.fao.org/4/x6844e/X6844E02.HTM
4. https://en.wikipedia.org/wiki/Gordon-Schaefer_model
5. https://rlhick.people.wm.edu/posts/gordon-shaefer-model.html
6. https://www.sciencedirect.com/topics/agricultural-and-biological-sciences/maximum-sustainable-yield
7. https://www.fisheries.noaa.gov/national/sustainable-fisheries/status-stocks-2019
8. https://www.nature.com/articles/s43247-024-01851-4