Research areas

Presently, I have three main research areas. The first one is modern regulation theory and renewable resources. The second one is measurement of productivity and capacity in renewable resource industries and the third is bio-economic and cost-benefit analysis. 

Regulation theory

Regulation of renewable resources is among other things characterized by the fact that the regulator doesn't have complete knowledge about all relevant factors. For example, the fishermen are the only ones that know exactly their real catches. When the regulation is based on catch limitations (as it is in many cases), it becomes important that the fishermen report its true catches, because complete monitoring and control is not possible. Such a system provides incentives to discard, illegal landings which imply that the goal of the regulation is often not fulfilled. Another example is lack of detailed information about the vessel's cost structure and production technology, which only the fishermen possess. Therefore regulation based on regulation of the use of inputs (e.g. restrictions of gear or size of boat) may lead to unexpected results, when the fishermen adjust to the regulation.

In general, the regulation problem in fisheries is in most cases a principal (regulator) - agent (fishermen) problem. By modeling explicitly the information problem and the interaction between the regulator and the fishermen, a regulation scheme can be designed, which in general shows that the lack of information results in a loss in efficiency, but at the same time secures that the goal of regulation is achieved.


Vestergaard, N. 2010. Principal-Agent Analysis in Fisheries. In Handbook for Marine Fisheries Conservation and Management by R. Quentin Grafton, Ray Hilborn, Dale Squires, and Meryl J. Williams (eds.). Oxford University Press.

Jensen, F. and N. Vestergaard. 2007. Asymmetric information and uncertainty: The usefulness of logbooks as a regulation measure. Ecological Economics, Vol 63(4), pp. 815-827.

Hansen, L.G., F. Jensen, U. S. Brandt and N. Vestergaard. 2006. Illegal Landings: An Aggregate Catch Self-Reporting Mechanism. American Journal of Agriculture Economics, Vol. 88(4), pp.974-985.

Jensen, F. and N. Vestergaard, 2003. Prices versus Quantities in Fisheries Models. Land Economics, Vol. 79, No. 3, pp. 415-425.

Jensen, F. and N. Vestergaard, 2002. A Principal - Agent Analysis of Fisheries. Journal of Institutional and Theoretical Economics, Vol. 158, No. 2, pp. 276-285.

Jensen, F. and N. Vestergaard, 2002. Moral Hazard Problems in Fisheries Regulation: The Case of Illegal Landings and Discard. Resource and Energy Economics Vol. 24(4), pp. 281-299.

Jensen, F. and N. Vestergaard 2001. Management of Fisheries in the EU: A Principal-Agent Analysis. Marine Resource Economics,  Vol. 16, pp. 277-291.

Efficiency, productivity and Capacity

Correct measurement of efficiency, productivity and capacity of sectors exploiting renewable resources is important because this can give the regulator information about whether the economic development of the sector is sustainable and it provides also information about factors influencing the technological development and the efficiency of the fleet. Modern production economic theory is applied to study these issues using methods such as the Stochastic Frontier Analysis and the Data Envelopment Approach. We have been developing an industry capacity model which we have applied to a German Bank Branch.

rd, J., N. Vestergaard and K. Kerstens, 2009. Ecological Benchmarking to Explore Alternative Fishing Schemes to Protect Endangered Species by Substitution: The Danish Demersal Fishery in the North Sea. Environmental and Resource Economics, Vol. 43(4), pp. 573-590.

Lindebo, E., A. Hoff and N. Vestergaard. 2007. Revenue-based capacity utilisation measures and decomposition: The Case of Danish North Sea Trawlers. European Journal of Operational Research, Vol. 180(1), pp. 215-227.

Kerstens, K., N. Vestergaard and D. Squires. 2006. A Short-Run Johansen Industry Model for Common-Pool Resources: Planning a Fisheries' Industry Capacity to Curb Overfishing. European Review of Agricultural Economics, Vol. 33(3), pp.361-389.

Vestergaard, N. 2005. Fishing Capacity in Europe: Special Issue Introduction. Marine Resource Economics. Vol. 20, pp. 323-326.

Kerstens, K., D. Squires and N. Vestergaard. 2005. Methodological Reflections on the Short-Run Johansen Industry Model in relation to Capacity Management. Marine Resource Economics, Vol. 20, pp. 425-443.

Vestergaard N., D. Squires, F. Jensen and J. L. Andersen, 2003. Technical Efficiency of the Danish Trawl fleet: Are the Industrial Vessels Better than Others? Nationaløkonomisk Tidsskrift 141(2): 225-242.

Vestergaard, N., D. Squires and J. Kirkley, 2003. Measuring Capacity and Capacity Utilization in Fisheries: The Case of the Danish Gill-net Fleet. Fisheries Research Vol. 60(2-3), pp. 357-368.

Vestergaard N., A. Hoff, J. L. Andersen, E. Lindebo, L. Grønbæk, S. Pascoe, D. Tingley, S. Mardle, O. Guyader, F. Daures, L. van Hoof, J.W. de Wilde and J. Smit, 2002. Measuring Capacity in Fishing Industries using the Data Envelopment Approach (DEA). EU Project Final Report, 99/005. University of Southern Denmark.

Bio-economic and Cost-Benefit Analysis

There is thousands of application of the bio-economic approach, but only a few formal applications of cost-benefit analysis to natural resources including fisheries. One aim of the research is to develop and apply cost-benefit analysis tools to dynamic problems using bio-economic approaches in a formal cost-benefit framework. Another aim is to analyse and apply bio-economic models. Currently I’m working on a simple age-structured bio-economic model.


Kronbak, L. G., Nielsen, J. R., Jørgensen, O. A. and N. Vestergaard. 2009.  Bio-economic evaluation of implementing trawl fishing gear with different selectivity. Journal of Environmental Management Vol. 90(11), pp. 3665-3674.

Agnarsson, S., R. Arnason, K. Johannsdottir, L.K. Sandal, S.I. Steinshamn, L. Ravn-Jonsen and N. Vestergaard. 2008. Multispecies and Stochastic issues: Comparative Evaluation of the Fisheries Policies in Denmark, Iceland and Norway. TemaNord2008, nr. 540. Copenhagen.

Arnason, R., L. K. Sandal, S.I. Steinshamn and N. Vestergaard 2004. Optimal Feedback Controls: Comparative Evaluation of Cod Fisheries in Denmark, Iceland and Norway. American Journal of Agricultural Economics, Vol. 86(2).

Vestergaard, N. 1995. Sustainable Exploitation of Renewable Resources: The Faroe Island cod fishery. (In Danish, abstract in English). Nationaløkonomisk Tidsskrift 133(3): 215-235.


Last updated 22. December 2009