More Money, More Fishing

The island of Kiribati began to subsidize coconut harvesting in the hopes of encouraging fishermen to switch to the coconut trade and thereby help preserve Kiribati’s reefs from the ravages of overfishing. But as NPR reports, the plan backfired: with more money coming in, coconut harvesters worked fewer hours, which left more time for their favorite leisure activities — including fishing, which increased 33 percent since the start of the program. Says one researcher who studied the unintended consequences of the subsidies: “It hit us like a bumper sticker saying — a bad day fishing is better than a good day working.” [%comments]

Nicholas Collard

Maybe the Kiribati government should do more to save the fish... or shape up and stop trying to control the market.

Kevin H

This is a good piece of evidence for neuroeconomists to keep around. It suggests that there are some powerful forces at work other than maximizing monetary reward. Describing those hidden variables is going to take at least a little bit of psychology.

David Sucher

I don't think this anecdote by itself proves much as fishing was both a job and a hobby. The idea of "encouraging fishermen to switch to the coconut trade " makes no sense when one of the raeson they fished was for FUN.


Why would we need behavioral/neuro-economics to explain this!? Seems like an excellent example of the backward bending supply curve of labour...

The policy implications are obvious. A tax on coconuts should keep the poor locals from fishing.


@Marco: don't be so sure that a tax is the answer. If the fish they catch have market value, they may fish more in response to reduced remuneration from coconuts. Backward bending supply of labor still has to account for opportunity cost.

Kourabi Kaiea

Fact: I-Kiribati (people of Kiribati) do not fish for fun/leisure. I-Kiribati fish for food. Seafood is the major source of protein in Kiribati (they are one of the highest consumers of fish). The government of Kiribati subsidises the price of copra (dried coconut) to provide a cash income for the rural I-Kiribati - much like a social security/safety net as there are very little other opportunities for rural I-Kiribati to make money. This ongoing initiative is in no way trying to prevent people from sustaining their daily requirement of harvesting food (fish). In the urban centre - fishing is a commercial activity whereby the fish are sold locally to (you guessed it) I-Kiribati. In the rural areas, any surplus fish caught is given to neighbours. Please get your facts right - the govt is not trying to prevent the I-Kiribati from eating.


Does this make coconuts a Giffen good?