Estimating economic losses to small‐scale fishers from shark conservation: A hedonic price analysis

Abstract Understanding wildlife markets is central to effective conservation: it can help managers and policy‐makers to predict how interventions might influence supply and demand of wildlife products, and economic welfare of wildlife users; and thus, design interventions which have better outcomes for wildlife and people. Here we apply a revealed preference method of economic valuation—hedonic price analysis (HPA)—to understand shark markets and explore the economic costs of shark conservation for small‐scale fishers. We focus on a targeted semi‐commercial shark fishery in Indonesia—which poses a threat to some shark species, but provides important economic and subsistence value for a coastal community in an impoverished region of Indonesia—and use HPA to estimate market prices and welfare measures for threatened and CITES‐listed sharks. This represents a pertinent case study with practical implications because Indonesia is the world's largest shark fishing nation, where management interventions to reduce shark fishing mortality are needed. However, such interventions will create short‐term socio‐economic trade‐offs for fishing communities, which may hamper cooperation and compliance, and raise concerns regarding the fairness and equity of conservation. Our results give significant marginal price estimates for five species of conservation and commercial importance. Dusky sharks (Carcharhinus obscurus) and bottlenose wedgefish (Rhynchobatus australiae) have the highest implicit marginal prices, at US$ 157 and US$ 144, respectively. Our estimates suggest that conservation measures, such as catch limits for endangered and CITES‐listed species, could have significant economic opportunity costs (i.e., 3.4–17.6% revenue foregone) for low‐income fishers. Innovative policy instruments are required to transform shark markets and fisheries—to effectively reduce threats to endangered species and implement CITES, whilst doing no harm to vulnerable coastal communities. Methods from econometrics can help conservation scientists to better understand wildlife markets, and make management decisions which create better outcomes for wildlife and people.