Marine hypoxia, a seasonal phenomenon, adversely affects parts of numerous waterbodies around the world. The effects extend to marine organisms. The objective of this paper is twofold. First, we present a simple theoretical model that can be used to analyze both the aggregate and distributional effects of hypoxia on harvest within an industry. Second, we use temporally and spatially differentiated harvest data for Connecticut Long Island Sound lobster industry, and a set of environmental and economic variables to estimate the contemporaneous and lagged effects of hypoxia on harvest shares across the three adjacent fishing zones, only one of which faces moderate to severe hypoxic conditions each summer. The key insight from the theoretical model shows that, theoretically, hypoxia can have an ambiguous effect on the optimal harvest shares from the hypoxic and non-hypoxic fishing zones. Results from the empirical model indicate that an increase in hypoxic water condition reduces the share of harvest from the hypoxic water zone, compared to the other fishing zones.


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