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Abstract
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.