Under the Convention, the IPHC's mandate is optimum management of the Pacific halibut resource, which necessazrily includes an economic dimension. Fisheries economics is an active field of research around the world in support of fisheries policy and management. Adding the economic expertise to the Secretariat, the IPHC has become the first regional fishery management organization (RFMO) in the world to do so.
The goal of the IPHC economic study is to provide stakeholders with an accurate and all-sectors-encompassing assessment of the economic impact of the Pacific halibut resource in Canada and the United States of America. The impacts, measured in terms of output along the value chain, but also employment and incomes, contribution to the GDP, and households' prosperity, will encompass all Pacific halibut sectors in Canada and the USA, including commercial, recreational, subsistence, and ceremonial. The study, described below, requires active participation of our stakeholders, including commercial fishers, processing plant operators, and charter business owners in developing the necessary data for analysis.
You can fill the IPHC economic survey by clicking one of the following links:
Commercial Vessel Expenditures Survey (Revised form)
Processing Plant Expenditures Survey (Revised form)
Summary of the survey responses to date can be viewed here. Check also our Pacific halibut economic impact visualization tool for the most up-to-date economic impact estimates. App manual is available as IPHC-2021-ECON-04.
Economic Impact Assessment – What Does it Entail?
The economic effects of changes to harvest levels can be far-reaching. Fisheries management policies that alter catch limits have a direct impact on commercial harvesters, but at the same time, there is a ripple effect through the economy. Industries that supply commercial fishing vessels with inputs, generally referred to as backward-linked sectors, rely on this demand when making decisions related to their production levels and expenditure patterns. For example, vessels making more fishing trips purchase more fuel and leave more money in a local grocery store that supplies crew members' provisions. More vessel activity means more business to vessel repair and maintenance sector or gear suppliers. An increase in landings also brings more employment opportunities, and, as a result, more income from wages is in circulation. When spending their incomes, local households support local economic activity that is indispensable to coastal communities' prosperity.
Changes in the domestic fisheries output, unless fully substituted by imports, are also associated with production adjustments by industries relying on fish supply, such as seafood processors. Similarly to the directly affected sector, any change in production by the forward-linked industry has a similar ripple effect on its suppliers. The complete path of landed fish, from the hook to the plate, also includes seafood wholesalers and retailers, and in the case of highly-prized fish such as Pacific halibut, services. Traditionally, the vast majority of Pacific halibut is consumed at white-tablecloth restaurants. Any change in gross revenue generated by these industries resulting from a change in the supply of directly affected fish is further magnifying the economic impact of management decision altering harvest levels.
Similar effects are attributed to the recreational fishing sector. By running their businesses, charter operators create demand for fuel, bait fish, boat equipment, and fishing trip provisions. They also create employment opportunities and generate incomes that, when spent locally, support various local businesses. What is more, anglers themselves contribute to the economy by creating demand for goods and services related to their fishing trips. A number of sectors supporting tourism rely on Pacific halibut fishing, both guided and unguided. These include lodging, local retailers, or restaurants.
Besides shaping the complex combination of local effects, the interlinked nature of the industries in the economy is creating cross-regional impacts. Economic benefits from the primary area of the resource extraction are leaked when inputs are imported, wages earned by nonresidents are spent outside the place of employment, or when earnings from quota holdings flow to nonresident beneficial owners. At the same time, the inflow of economic benefits to the local economies from outside is occurring when products are exported or local businesses are bringing tourism cash to the region.
These kinds of effects are typically estimated with the use of the input-output (IO) model. The traditional IO model is used to investigate how changes in final demand affect economic variables such as output, income and employment or contribution to the region’s gross domestic product (GDP). This is known as impact analysis. With an adjustment for the shock type, the model can also demonstrate the magnitude of changes in supply-constrained industries such as total allowable catch (TAC) constrained fisheries.
Adopting the IO model extended to the so-called social accounting matrix (SAM), the calculated effects account for labor commuting patterns and flow of profits related to non resident investment in production factors. This is of particular interest when focusing on industries that employ a considerable share of non residents or allow earnings from holdings by investors from out of state or province. In both of these cases, there is an outflow of income from the primary region.
Understanding the multiregional impacts of changes to fisheries sectors is now more important than ever considering how globalized it is becoming. Fish harvested on the other side of the globe can be easily found on the shelf or on the menu in the United States or Canada, competing with domestically produced seafood. The United States and Canada imported seafood worth over USD 28.8 billion (CAD 37.4 billion) in 2018. On the production side, the origin of inputs is increasingly distant, implying a gradual shift of economic activity supported by fisheries and seafood industries abroad. While generally cost-effective, such high exposure to international markets makes seafood accessibility fragile to perturbations, as shown by the covid-19 outbreak. Fisheries are also at the forefront of exposure to the accelerating impacts of climate change. A rapid increase in the water temperature of the coast of Alaska, termed the blob, is affecting fisheries and may have a profound impact on Pacific halibut distribution. Thus analyzing the sector in a broader context is crucial.
A good grasp of the multiregional impacts is also fundamental to correctly assess the impacts the resource such as Pacific halibut has on communities. Some of the local communities particularly rely on fishing-related economic activities. A good understanding of localized effects is pivotal to policymakers who are often concerned about community impacts, particularly in terms of impact on employment opportunities and households’ welfare. Fisheries policies have a long history of disproportionally hurting smaller communities, often because potential adverse effects were not sufficiently assessed.
Pacific halibut multiregional economic impact assessment (PHMEIA) model is a multiregional SAM-based model describing economic interdependencies between sectors and regions developed to bring a better understanding of the role and importance of the Pacific halibut resource in the economy of Alaska, British Columbia, and the US West Coast. Moreover, the model simultaneously assesses indirect impacts on the rest of the United States and Canada to determine the resource’s full economic impact on IPHC Contracting Parties. The economic metrics derived from the PHMEIA model range from total economic impact on output along the value chain to impacts on employment and incomes, as well as contribution to the GDP and households’ prosperity.
The PHMEIA model accounts for three economic impact (EI) components. The direct EIs reflect the changes realized by the direct Pacific halibut resource stock users (fishers, charter business owners). The indirect EIs are the result of business-to-business transactions indirectly caused by the direct EIs. The indirect EIs provide an estimate of the changes related to expenditures on goods and services used in the production process of the directly impacted industries. In the context of the PHMEIA, this includes an impact on upstream economic activities associated with supplying intermediate inputs to the direct users of the Pacific halibut resource stock. Finally, the induced EIs result from increased personal income caused by the direct and indirect effects. In the context of the PHMEIA, this includes economic activity generated by households spending earnings that rely on the Pacific halibut resource.
This study's main contribution is the first consistent estimation of both backward- and forward-linked effects of changes in fisheries supply in a multiregional setup tracing the transmission of impacts internationally. By linking multiple spatial components, the model offers a better understanding of the impacts of shared stock supply changes. Besides providing economic impact estimates for broadly-defined regions, the PHMEIA model results also inform on the Pacific halibut’s community impacts throughout its range and highlight communities particularly dependent on fishing-related economic activities. Moreover, given the complexity of Pacific halibut supply-side restriction in the form of region-based allocations, the regulators’ need for assessment of various combinations of TAC allocations is addressed by accompanying the result with a web-based tool allowing custom changes simultaneously applied to all IPHC-managed Pacific halibut producing areas.
In order to accurately capture the economic impacts described, the IPHC designed a series of surveys to gather information from the sectors relying on the Pacific halibut resource. We call for active participation of our stakeholders, including commercial fishers, processing plant operators, and charter business owners, in developing the necessary data for analysis. While the current version of the model is based on primarily secondary data sources and therefore conditional on the adopted assumptions for the components for which data are not routinely collected and published, the subsequent revisions of the model incorporating IPHC-collected data will bring improved estimates on the Pacific-halibut sectors’ economic impact.
Under the Convention, the IPHC’s mandate is “optimum” management of the Pacific halibut resource, which necessarily includes an economic dimension. However, until now, the focus has been rather on the sustainable harvest from the ecological perspective. This has been also the focus of the IPHC’s management strategy evaluation (MSE) , although the inclusion of socioeconomic performance metrics is currently considered (see IPHC-2021-SRB018-10).
Federal laws governing U.S. marine fisheries require assessing any proposed fishery management action in terms of its regional or community economic impacts. These laws include, among others, the Magnuson-Stevens Fishery Conservation and Management Act (MSA, amended on January 12, 2007), National Environmental Policy Act (NEPA), and Executive Order 12866. For example, the National Standard 8, one of the principles mandated by the MSA, requires that while the conservation and management measures must be consistent with the conservation requirements, they must also account for “the importance of fishery resources to fishing communities” and “to the extent practicable, minimize adverse economic impacts on such communities” (Section 301[a]8). It implies that fishery managers, when considering any action, must take into account the economic impact on various stakeholder groups, including fishers, but also processors and fishing-dependent communities. The MSA also establishes Regional Fishery Management Councils, which role is to develop fisheries management plans that “take into account the social and economic needs of the States” while working on the stewardship of fishery resources. Lately, NOAA recommended routine consideration of socioeconomic drivers in the fisheries stock assessment process (Next Generation Stock Assessment framework).
The document establishing national fisheries policy in Canada for the modern era is the 1976 Policy for Canada’s Commercial Fisheries. It states that “the guiding principle in fishery management no longer would be maximization of the crop sustainable over time but the best use of society’s resources.” The “best use” is defined as “the sum of net social benefits (personal income, occupational opportunity, consumer satisfaction and so on) derived from the fisheries and the industries linked to them” (Fisheries Act, R.S.C. 1985, c. F-14). These objectives have been affirmed in legislation (Oceans Act, S.C. 1996, c.31), according to which fisheries are expected to be managed to meet a full spectrum of social and economic objectives. More recently, the commitment to the sustainability of fisheries – “as a vital part of our [Canada’s] food supply, as well as an important source of jobs and economic activity for coastal communities” – has been reaffirmed in in the Government Response to the report West Coast Fisheries: Sharing Risks and Benefits by the Standing Committee on Fisheries and Oceans from July 8, 2020.
Pacific Halibut and Covid-19
Recent perturbations in the markets caused by covid-19 serve as an additional argument for considering the broader economic dimension of Pacific halibut's contribution to regional economies. Widespread closure of restaurants (Figure 1), the Pacific halibut’s biggest customers, diminished the demand for fish, particularly high-quality fresh fish that fetch higher prices. Lower prices, down in 2020 by up to 30% compared with the previous year (Stremple 2020), caused a slow first half of the season (Ess 2020, see also IPHC data on the year to date landings). Less harvest activity has repercussions in the economy beyond the harvest sector as it affects also harvest sector suppliers and downstream industries that rely on its output. Outbreaks of covid-19 in fish processing plants (Estus 2020; Krakow 2020) also affect economic activity generated regionally by this directly related to the Pacific halibut supply sector. Moreover, seafood processors incur additional costs related to protective gear, testing, and quarantine accommodations (Ross 2020; Sapin and Fiorillo 2020; Welch 2020b).
It is difficult to predict such events and resulting market shifts. Although there may be a market for excess seafood that could not be sold to restaurants as worried customers are stockpiling frozen and canned products (Sapin 2020), and more adventurous home-cooking is on the rise (Varriano 2020), building in such transitions into the model structure requires strong assumptions as no reliable data on such events are available.
Figure 1: Monthly Retail Trade and Food Services - Food Services and Drinking Places: US Total. Based on US Census data.
Development of the Model
Economic Impact Metrics
The supply and use tables (SUTs) focus on measuring the productive structure of the economy. They trace the production of commodities (both goods and services) by domestic industries, combined with imports, through their use as intermediate inputs or as final consumption, investment, or exports. The system provides a measure of value added by industry - total output less intermediate inputs. These tables can be used to calculate economy-wide gross domestic product (GDP). The supply and use tables can also be used to build an input-output (IO) model (Leontief 1966). The IO model is used to investigate how changes in final demand or supply (using modified IO model, see details in Leung and Pooley 2002) affect economic variables such as output, income and employment or value added that provides an assessment of the sector’s contribution to the GDP in a region. This is known as impact analysis.
The IO model typically accounts for three economic impact (EI) components:
Changes in the domestic fisheries output, unless fully substituted by imports, are associated with production adjustments by industries relying on fish supply, such as seafood processors. Forward linkages describe the effects on the industries for which the affected sector is a supplier, defining its relations with the downstream industries. While early attempts to include forward linkages in the calculation of economic impacts have been criticized for the lack of economic foundation, recent methodological advances (e.g., Seung 2014, 2017) allow for such extension.
The figure below summarizes the impacts considered when analyzing commercial harvesters as users of the Pacific halibut resource.
Besides shaping the complex combination of local effects, the interlinked nature of the industries in the economy is creating cross-regional impacts. Policies or any other exogenous changes may have an economic impact not only on the region where they are observed but also on the regions with strong economic ties with the region subjected to the change. A multiregional IO model accounts for that. The general structure of the input to the multiregional IO model is presented in Figure 2.
The standard input-output framework provides little insight into the workforce’s demographics that build the market for supply and demand of labor. Adopting the IO model extended to the so-called social accounting matrix (SAM), the calculated effects account for commuting patterns where the labor’s place of employment and place of residence differ. The structure of SAM with endogenized households is available in Figure 3. It is of particular use when focusing on industries that employ a considerable share of nonresidents for temporary assignments that imply a negative net flow of income to the region and, consequently, impacts on households are not necessarily equal to impacts on earnings in the region. The SAM-based model with endogenous households also allows for detailed accounting of household earnings by place of residence, including earnings from other sources (e.g., government transfers, dividends, interest, and rent), outflows to the government (e.g., personal income taxes), and households net savings by region. The model components associated with household accounts largely align with these considered in Seung (2014).
The PHMEIA model is a multiregional SAM-based model developed with the specific purpose of assessing the economic contribution of Pacific halibut resource to the economy of the United States and Canada. The model reflects the interdependencies between eleven major sectors, both producing goods and services, as well as two Pacific halibut-specific sectors. These include the Pacific halibut commercial fishing sector and the forward-linked Pacific halibut processing sector. In addition, the extended model (PHMEIA-r) introduces to the SAM also the Alaskan saltwater charter sector that is disaggregated from the services-providing industry. The inclusion of the British Columbia and US West Coast charter sector is underway. The list of industries considered in the PHMEIA and PHMEIA-r models, as well as primary commodities they produce, is available in the Table 1. The model considers three primary Pacific halibut producing regions, as well as residual regions, to account for cross-boundary effects of fishing in the Pacific Northwest:
This multiregional setup implies an extension of the model in Seung, Waters, and Taylor (2019), which is limited to Alaska, the US West Coast, and the rest of the US. The model also adopts a recently published multiregional generalized RAS (MRGRAS) updating technique (Temursho, Oosterhaven, and Cardenete 2020) to develop an up-to-date model that can incorporate partial information on its components while continuing to conform to the predefined balanced structure. This technique can make the multiregional model consistent with aggregated national data and include up-to-date estimates from a limited number of focus sectors. For more details on the updating approach, please refer to the article Method for efficient updating of regional supply and use tables (Journal of Economic Structures, In Review).
The US components of the model use as a base the data from the species-based SAM developed by Seung, Waters, and Taylor (2019) updated using data published by the US Bureau of Economic Analysis (BEA) supplemented with BEA Regional Data resources, data from United States Census Bureau’s Annual Survey of Manufactures (ASM) and Quarterly Census of Employment and Wages (QCEW), as well as detailed fisheries statistics (described in IPHC-2021-ECON2). As the original model did not include Pacific halibut-specific production structures for the WC region, these are adopted from estimates for the West Coast provided directly by the authors of the NOAA input-output model for the Pacific Coast fisheries (Leonard and Watson 2011; Pacific halibut estimates not published).
The model components describing the Canadian economy are based on SUTs published by Statistics Canada supplemented with data from Monthly Survey of Manufacturing, Labour Force Survey and Survey of Household Spending, as well as detailed fisheries statistics (described in IPHC-2021-ECON2). British Columbia’s Pacific halibut fishing production structure is based on average operational and fixed cost available in the literature (Edwards and Pinkerton 2020). As no secondary data are available on British Columbia’s Pacific halibut processing production structure, the allocation of expenditures for this sector follows that adopted for Alaska. Derived this way use of commodities is appended to SUTs and subtracted from production by general fishing and processing industries.
The multiregional model is assembled adopting a method suggested by Bachmann, Roorda, and Kennedy (2015). Accordingly, international linkages are established through trade matrices. These, in turn, are constructed based on available trade statistics (mainly US Census trade data and Canadian International Merchandise Trade Database). For industries with no regional trade statistics available (some services), distribution from the base model is adopted for the country of origin, and split between destination regions is done based on regional GDP estimates.
The flow of earnings is derived from national accounts and allocated using IRS tax stats and BEA data on International Transactions with details by country. The model also specifies the flow of earnings related to Pacific halibut fishing. If the vessel or quota share is owned by a non resident, the returns to that property or holding leak away from the area of resource extraction towards the owner’s place of residence. The outflow of earnings also occurs when wages are paid to non residents. The accommodation of Pacific halibut-specific earnings flow in the SAM model is presented in Figure 4, while statistics on these flows are described in IPHC-2021-ECON-02.
The ROW region in the model is considered exogenous. This implies that the trade relations with the ROW are not affected by the changes to the Pacific halibut sector considered in this project. However, the inclusion of the ROW component, constructed using World Input-Output Tables (WIOT), allows for assessment of impact also outside Canada and the United States if trade with ROW was to be considered responsive to changes in Pacific halibut sector activity.
In this model, all wild capture production, including all Pacific halibut harvest, is assumed to be supplying the seafood processing industry (Pacific halibut supplying Pacific halibut processing industry). This implies a broader scope of the processing sector that also includes entities responsible for product preparation and packaging. Under this assumption, Pacific halibut and other harvested species are sold to other industries or final users only as a seafood commodity as opposed to a fish commodity. Leonard and Watson (2011) note that about 30% of fish harvested in the US West Coast flow directly to the seafood wholesale sector, but no data to make such a distinction are available and simplifying assumption is made. At this stage, the model also omits the economic benefit of Pacific halibut not sold but retained by commercial fishers for personal consumption.
The model adopts exogenous changes to Pacific halibut processing based on constant margins for calculation of effects related to forward-link industries, adopting the method described in Seung (2014, 2017). This means the model assumes a proportional change between the Pacific halibut processing sector and the Pacific halibut fishing sector in each region. The model omits Pacific halibut impacts beyond the processing sector. As noted by Steinback and Thunberg (2006), there are many seafood substitutes available to buyers. Thus including impacts beyond processors and wholesalers could be misleading considering that it is unlikely that supply shortage would result in a noticeable change in retail level gross revenues. As noted earlier, data limitations dictate the exclusion of wholesale buyers from the assessment of forward-linked effects.
Recreational sector in the PHMEIA model - PHMEIA-r
There are two components to consider when attempting to assess the full scope of the Pacific halibut resource’s economic impact occurring as a result of recreational fishing activities. The first is the contribution to the economy by the charter sector that provides service to anglers. These include services directly related to angling, such as providing a boat, trip supplies, and guides, and not directly related, for example, hospitality services in case of fly-in lodges that specialize in serving customers interested in the Pacific halibut fishing. The economic impact is generated by the sector’s demand for inputs from other industries, including manufacturing, professional services (e.g., accounting, marketing), and demand for labor.
The second component is the contribution of anglers themselves by creating demand for goods and services related to their fishing trips. This includes expenses related to the travel that would otherwise not be incurred (e.g., auto rental, fuel cost, lodging, food, site access fees), as well as money spent on durable goods that are associated with recreational fishing activity, e.g., rods, tackle, outdoor gear, boat purchase, and applies to both guided and unguided recreational fishing. Assessment of anglers’ contribution to the economy typically requires surveying private anglers on their fishing-related expenditures and fishing preferences. The stated-preference model is usually used to estimate the change in fishing participation caused by trip characteristics changes.
The figure below summarizes the impacts of Pacific halibut recreational fishing on the economy. The extended PHMEIA-r model introduces to the SAM the Alaskan saltwater charter sector.
More on model development
Document IPHC-2021-ECON-01 reviews relevant economic impact assessment studies focused on the fisheries sector. Document IPHC-2021-ECON-02 provides a compendium of fisheries-related economic statistics used in the model. Document IPHC-2021-ECON-03 contains the methodological annex.
IPHC Economic Survey
In order to accurately capture the economic impacts of the Pacific halibut, the IPHC has designed a series of surveys to gather information from the sectors relying on this resource. Further development of the PHMEIA model requires active participation of our stakeholders who we ask for necessary data for analysis.
Participants to the Pacific halibut fisheries (commercial, processing, and charter sector) are encouraged to fill the form for 2020, but also retrospectively submit information for 2019. Responses are accepted on a rolling basis and used to update the results periodically. The benefits of filling for each year:
Note that this type of data is typically collected periodically. In general, the production structure is not changing substantially from year to year. However, given the unusual period, the data collected for the 2019-2021 period would have a unique value and could be used to assess more substantial shifts in the fishery.
The subsequent revisions of the model incorporating IPHC-collected data will bring improved estimates on the Pacific halibut sectors’ economic impact.
The preliminary survey results are available to all contributors and prospective participants for comparison with regional and local averages here.
Economic impact assessment results
This section summarizes the most recent outcomes of the PHMEIA and PHMEIA-r models. It is important to note that these are based on the current version of the model incorporating primarily secondary data sources. As such, the results are conditional on the adopted assumptions for the components for which data were not available and are subject to change.
The model results suggest that Pacific halibut commercial fishing’s total estimated impact in 2019 amounts USD 194 mil. (CAD 258 mil.) in earnings (including an estimated USD 43 mil / CAD 56 mil in earnings in the Pacific halibut fishing sectors), USD 134 mil. (CAD 178 mil.) in compensation of employees (including estimated USD 27 mil / CAD 35 mil in wages in the Pacific halibut fishing sectors), 4,326 in jobs, USD 178 mil (CAD 237 mil.) in households income, and over USD 665 mil. (CAD 883 mil.) in output. This is about 5.3 times the fishery output value of USD 126 mil. (CAD 168 mil.) recorded for 2019. The estimate is the total economic impact, the sum of the direct, indirect, and induced effects from changes to the Pacific halibut fishing sector, as well as indirect and induced effects associated with forward-linked industries (Pacific halibut processing sector).
The results suggest that the revenue generated by Pacific halibut at the harvest stage accounts for only a fraction of economic activity that would be forgone if the resource was not available to commercial fishers in the Pacific Northwest. Besides supporting production by other industries, the sector also contributes to Canada and the United States’ GDP, and has a considerable impact on employment in both countries. Understanding such a broad scope of impacts is essential for designing policies with desired effects depending on regulators’ priorities.
Moreover, the results suggest that incorporating Pacific halibut-specific outflows has a considerable impact on results. Table 2 shows the estimates of economic impact on households in Alaska from the final model contrasted with estimates from the model that does not account for cross-regional flows of earnings. While 1USD of Pacific halibut output could generate USD 0.71 USD for Alaskan households, out-of-state employment and flow related to beneficial ownership of Pacific halibut fishing rights in Alaska (i.e., quota holdings) cause the estimate to drop to USD 0.58.
The complexity of Pacific halibut supply-side restriction in the form of region-based allocations suggests the need for a tool enabling regulators to assess various combinations of TAC allocations. To address this, the results are complemented by an interactive web-based application allowing users to estimate and visualize joint effects based on custom changes simultaneously applied to all IPHC-managed Pacific halibut producing areas. The tool is available here. The app is complemented by a manual that can be downloaded here.
Community impacts in Alaska
Besides providing economic impact estimates for broadly-defined regions, the PHMEIA model results can inform the community impacts of the Pacific halibut resource throughout its range and highlight communities particularly dependent on fishing-related economic activities.
Based on the 2019 PHMEIA model, Pacific halibut commercial output (Pacific halibut landed under IFQ and CDQ) in Alaska of USD 86 mil. generated through Pacific halibut directed commercial fishing and directly forward-linked Pacific halibut processing about USD 28 mil of earnings, of which USD 20 mil. (70%) was retained in Alaska. These earnings were not evenly distributed. The most direct earnings per dollar landed are estimated for Ketchikan Gateway county, while the least for Aleutians East. Low earnings per 1 USD of Pacific halibut landed in the county are a result of the outflow of earnings related to vessels’ home base, vessels’ ownership and quota ownership, processing locations and processing companies’ ownership.
The updated PHMEIA app (release 2.0) translates regional economic impacts to county-level estimates based on changes in harvest allocations by IPHC Regulatory Area using eLandings data that include the harvest location. Community effects assessment is currently limited to Alaska. The feasibility of a similar assessment for other regions is currently under investigation.
Economic impact of Pacific halibut charter fishing in Alaska
Assuming that the economic impact of Pacific halibut charter fishing in Alaska is equivalent to estimating the total economic loss resulting from the saltwater charter sector therein shrinking by share of Pacific halibut effort in total effort (22.4% in 2019), the total economic impact of Pacific halibut charter sector in Alaska is assessed at USD 87.7 mil for 2019.
It is more meaningful, however, to analyze the Pacific halibut charter sector in terms of its contribution to households, particularly to local households. Table 3 summarizes the results, also providing a comparison with the economic impact on households of commercial fishing in Alaska. Not surprisingly, the economic impact per 1 USD of output is higher for the commercial vs. the charter sector. The commercial sector is producing an intermediate input that is not only supporting suppliers to the harvesting sector, but also the forward-linked processing sector. However, the economic impact of 1 lbs of Pacific halibut removal counted against TAC in the stock assessment is 66% higher for the charter sector when compared with the commercial sector.
It should also be noted that this assessment accounts for only a fraction of the Pacific halibut contribution to the economy through recreational fishing. The analysis, at this time, does not account for the impact of anglers spending money on durable goods they use on the charter trips (e.g. fishing equipment) and expenditures by private anglers. The analysis is also not accounting for potential changes in anglers' behavior that could result from different harvest limits.
Remarks on the results
The updated PHMIA model translating the changes in harvest allocations by IPHC Regulatory area directly to economic impact is also well adapted to use with the Pacific halibut management strategy evaluation (MSE) framework. Economic performance metrics presented alongside already developed biological/ecological performance metrics would bring the human dimension to the MSE framework, adding to the IPHC’s portfolio of tools for assessing policy-oriented issues. Such MSE extension is currently under consideration.
Lastly, while the quantitative analysis is conducted with respect to components that involve monetary transactions, Pacific halibut’s value is also in its contribution to the diet through subsistence fisheries and importance to the traditional users of the resource. To native people, traditional fisheries constitute a vital aspect of local identity and a major factor in cohesion. One can also consider the Pacific halibut’s existence value as an iconic fish of the Northeast Pacific. While these elements are not quantified at this time, recognizing such an all-encompassing definition of the Pacific halibut resource contribution, the IPHC echoes a broader call to include the human dimension into the research on the impact of management decisions, as well as changes in environmental or stock conditions.
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|IPHC-2021-ECON-01||Economic Literature Review||09 Feb 2021|
|IPHC-2021-ECON-02-R01||Economic Statistics||09 Feb 2021|
|IPHC-2021-ECON-03||Economic Research Method||09 Feb 2021|
|IPHC-2021-ECON-04||PHMEIA App Manual||27 May 2021|