A simple simulation approach to risk and cost analysis, with applications to swordfish and cod fisheries

Monte Carlo simula­ tion is used to quantify the uncer­ tainty in the results of sequential population analysis and related sta­ tistics. Probability density functions describe the measured or perceived uncertainty in the inputs to the assessment model. Monte Carlo sim­ ulation is then used to examine the variability in the resulting parameter estimates (stock sizes and fishing mortalities), derived statistics (e.g., F0.1), and in the management regu­ lations necessary to achieve various management objectives. We show how relative frequency histograms of the simulation results can be used to describe the risk of not meeting a given managementgoal as a function of the catch quota selected. We also show how to compute the expected cost, in terms of potential yield fore­ gone, associated with picking a con­ servative quota. This enables one to balance risks and costs or to allow risk to vary within proscribed limits while keeping the catch quota stable. We illustrate the use of the Monte Carlo approach with examples from two fisheries: North Atlantic sword­ fish and northern cod.