THE EFFECTS OF REGULATIONS ON EFFICIENCY OF U.S. BAITFISH AND SPORTFISH PRODUCERS.  

To develop a deeper understanding of the costs of the U.S. regulatory environment on producers of baitfish and sportfish, a technical efficiency analysis was performed using a stochastic production frontier model. Technical efficiency estimates were obtained, using the joint estimated least likelihood procedure of Frontier 4.1, for all firms in the study group and determinants of inefficiency were assessed for their role in the reduction of farm efficiency. Mean technical efficiency for U.S. baitfish and sportfish producers was found to be 77%; with a minimum of 8% and a maximum of 97%. Regulatory cost components such as "lost/foregone sales", "changes to comply with regulations" and "manpower to comply with regulations, were found to be significant factors of inefficiency within the model. Results have supplied additional evidence to support the hypothesis that the current regulatory environment is reducing efficiency and economic competitiveness of baitfish and sportfish producers.