Understanding the Portfolio Effect: a Global Meta-Analysis of Exploited Marine Ecosystems

Just as diverse investment portfolios can dampen fluctuations and reduce risk, biodiversity in exploited marine ecosystems appears to be an important mechanism for reducing variability in fishery landings.  To date, analyses of the “portfolio effect” in fisheries have been limited to specific regions or ecosystems.  Using a global database of fish and invertebrate stock assessments, I examine how the portfolio effect operates across a range of 18 large marine ecosystems.  These ecosystems differ in their species diversity, fisheries selectivity (single vs. multi-species), and covariance patterns among the exploited species.   Greater species diversity in an exploited ecosystem leads to stronger variance dampening as measured by the CV ratio (coefficient of variation summed across all species divided by the mean coefficient of variation for individual species).  Covariance patterns also play an important role with strong positive covariance among species reducing the portfolio effect.  These results are supported by simulations.