Description: In this report we have attempted to evaluate the ecological and economic consequences of hypoxia in the northern Gulf of Mexico. Although our initial approach was to rely on published accounts, we quickly realized that the body of published literature deahng with hypoxia was limited,and we would have to conduct our own exploratory analysis of existing Gulf data, or rely on published accounts from other systems to infer possible or potential effects of hypoxia.For the economic analysis, we developed a conceptual model of how hypoxia-related impacts could affect fisheries. Our model included both supply and demand components. The supplymodel had two components: (1) a physical production function for fish or shrimp, and (2) the cost of fishing. If hypoxia causes the cost of a unit of fishing effort to change, then this will result in a shift in supply. The demand model considered how hypoxia might affect the quality of landed fish or shrimp. In particular, the market value per pound is lower for small shrimp thanfor large shrimp.Given the limitations of the ecological assessment, the shallow continental shelf area affected by hypoxia does show signs of hypoxia-related stress. While current ecological conditions are a response to a variety of stressors, the effects of hypoxia are most obvious in the benthos that experience mortality, elimination of larger long-lived species, and a shifting of productivity to nonhypoxic periods (energy pulsing). What is not known is whether hypoxia leads to higher productivity during productive periods, or simply to a reduction of productivity during oxygen-stressed periods.The economic assessment based on fisheries data, however, failed to detect effects attributable to hypoxia. Overall, fisheries landings statistics for at least the last few decades have been relatively constant. The failure to identify clear hypoxic effects in the fisheries statistics does not necessarily mean that they are absent. There are several possibilities: (1) hypoxic effects are small relative to the overall variability in the data sets evaluated; (2) the data and the power of the analyses are not adequate; and (3) currently there are no hypoxic effects on fisheries.Lack of identified hypoxic effects in available fisheries data does not imply that effects would not occur should conditions worsen. Experience with other hypoxic zones around the globe shows that both ecological and fisheries effects become progressively more severe as hypoxia increases. Several large systems around the globe have suffered serious ecological and economic consequencesfrom seasonal summertime hypoxia; most notable are the Kattegat and Black Sea. The consequences range from localized loss of catch and recruitment failure to complete system-wide loss of fishery species. If experiences in other systems are applicable to the Gulf of Mexico, thenin the face of worsening hypoxic conditions, at some point fisheries and other species will decline, perhaps precipitously.