Economic Impacts of Eutrophication

Although research on the economic effects of hypoxic zones in the Gulf of Mexico is an emerging field, experts agree that the continued expansion of dead zones will lead to wide-spread economic downturns in the region. Heavy fishing pressures in this region that are deeply tied to the fishing industry makes the effects of dead zones even harder to calculate than usual. The Gulf of Mexico fishing industry is worth $680 billion, annually. Catches from this region account for 40% of the United States’ annual fishing yield. Shrimp, one of the most popular seafood options globally, account for a $400 billion annual industry in the Gulf of Mexico on their own. In 2017, a landmark study from Duke University was able to empirically link rising shrimp prices to rising eutrophication in the Gulf. 

When the hypoxic zones begin to form, species unable to migrate will die off in masses, decreasing their fish stocks and increasing fishing pressure if the demand for that species is inelastic. As stated above, concentration into smaller areas of suitable habitat makes overfishing probable when fishermen begin to find these densely populated pockets. While nutrient overloading can cause a small boom in fish populations before dead zones begin to form, the complete desolation of these Gulf fisheries will more than undo the gains from the short boom period. The effects of the loss of fish stocks will be felt far wider than by the fishermen alone. Downturns in the fishing industry will have cascading negative effects on the processing, restaurant, hospitality, and tourism industries in and around the Gulf of Mexico as well. 

Hypoxic zones are what economists describe as a “negative externality” where the negative cost incurred by the production of a product is not paid for by the producer. In other words, the industries and individuals in the Corn Belt and throughout the Midwest creating the nutrient pollution that feeds dead zones in the Gulf are not the ones feeling the negative economic effects. Because of this, it is hard to make the connection between far off parties and the dead zones in the Gulf, and even harder to convince nutrient polluters to change to more environmentally friendly practices. There is a strong economic incentive to continue business as usual because profit is still being made while someone else suffers the consequences.


Image citations:

Fishing Boat (NOAA:

Shrimp Platter (Keeping Stock: