Journal of Agricultural and Resource Economics
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This paper provides empirical evidence that reference-dependent preferences help to explain the amount of effort exerted by shrimpers in the Gulf of Mexico. Using survival analysis, the authors find that shrimpers tend to prolong their trip when their current trip revenue goal remains unattained. Furthermore, this tendency became more pronounced after 2001 in association with a significant decline in the shrimp price. This may partially explain the less obvious decrease in fleet effort vis-à-vis sharp decline in fleet size following the price change.
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