Fisheries Economics

3.2.4. Production function model

The basic production function in the case of fisheries could take the simple form of Cobb-Douglas production function. If Y refers to the fish produced and x1, x2, x3 and x4 refer to the inputs used, then the production function is specified as follows :

Y = f (x1, x2, x3, x4).

Specification of an appropriate functional form is very important to draw meaningful conclusions in production function analysis. Although several functional forms like linear, log linear, quadratic, polynomial, parabolic, etc. are available, we need to identify the one which best suits the data collected and our needs. The choice of the functional form could be decided on the basis of scattergrams. The scattergram reveals how the input and output data are distributed and indicates the overall trend.