THE EFFECT OF ENVIRONMENTAL CONDITIONS AND REGULATORY COSTS ON OYSTER RELAYING IN LOUISIANA

The transferring of preharvest oysters from restricted to approved harvest waters, a process called relaying, is one way oystermen may avoid degraded environmental conditions and increase the net return from their leases. In recent years, however, Louisiana oystermen have shown little interest in relaying. The demand for relaying permits in Louisiana, the nation's leading producer of direct market oysters, was estimated using a Poisson regression model that incorporated economic factors, environmental conditions, and a discrete measure of regulatory costs. Harvest prices, input and regulatory costs, environmental indicators, and the productivity of public and private (leased) water bottoms all significantly influenced the number of permits demanded. At the margin, output prices, environmental indicators, and regulation-induced costs had the most significant impact on permit demand. In particular, the cost of regulatory compliance appears to be a major factor behind the unwillingness of Louisiana oystermen to employ relaying in their harvest activities.