Alaskan fishing community revenues and the stabilizing role of fishing portfolios

Fishing communities are subject to economic risk as the commercial fisheries they rely on are intrinsically volatile. The degree to which a community is exposed to economic risk depends on a community's ability to confront and/or alter its exposure to volatile fishery conditions through risk-reduction mechanisms. In this article, economic risk - as measured by community-level fishing gross revenues variability - is characterized across Alaskan fishing communities over the past two decades, and exploratory analyses are conducted to identify associations between community attributes and revenues variability. Results show that communities' fishing portfolio size and diversification are strongly related to fishing revenues variability. Communities with larger and/or more diverse fishing portfolios experience lower fishing revenues variability. Portfolio size and diversification appear to be related to the number of local fisheries, indicating that communities' portfolios may be constrained to the set of local fisheries. Hotspots of relatively higher fishing revenues variability for communities in north and west Alaska were identified, mirroring the spatial distribution of fishery-specific ex-vessel revenues variability. This overall pattern suggests that a community's fishing portfolio - and hence its exposure to risk - may be predetermined by its location, thereby limiting the policy options available to promote economic stability through larger and/or more diverse fishing portfolios. For such communities, diversifying income across non-fishing sectors may be an important risk reduction strategy, provided any potential negative cross-sector externalities are addressed. (C) 2014 Elsevier Ltd. All rights reserved.