Input/Output Analysis Estimates Economic Contribution of Hawaii Fisheries

PIFSC economists have collaborated with University of Hawaii researchers to measure the economic contribution of various fishery sectors to the state economy. At the PFRP Workshop "From Foodwebs to Ecosystem Models", held December 15-16, 2010 at the University of Hawaii at Manoa, JIMAR Economic Specialist Shawn Arita presented preliminary findings of the study. A draft research paper entitled, "The Distributive Economic Impacts of Hawaii's Fisheries" was completed by Shawn Arita, Minling Pan, Justin Hospital, and PingSun Leung.

Previous input-output (I-O) studies of Hawaii’s fisheries have been based on I-O tables that focus only on economic linkages among production sectors. In addition to the I-O tables, the current study used a Social Accounting Matrix (SAM), which provides additional information about sectors' linkages through institutional factors such as income distribution, consumption patterns, taxation, and transfer payments. Also, the study employed recently updated Hawaii fishery cost-earnings data collected by PIFSC economists Minling Pan and Justin Hospital.

The SAM developed for Hawaii found relatively strong backward linkages between the fishery sectors and the rest of the economy, highlighting the relatively input-intensive structure of the sector. For the Hawaii tuna longline sector, a $1 increase in supply results in an additional direct increase to the non-fishery sectors of $0.87. The increase in fuel costs and subsequent decrease in profits over the recent years are the leading forces increasing these economic multipliers. The small commercial boat sector also showed strong overall backward linkages, where the "own" multipliers on the other production sectors contribute an additional $2.61 for the pelagic small boats for each generated dollar of increased activity.

The distributional analysis of the SAM indicated that the longline sector affects the middle income household groups most strongly, with modest linkages to the lower income groups and relatively low linkages to the high income groups. However, the impacts on the low-income household groups significantly increase with the inclusion of foreign crew member labor compensation. While the Hawaii tuna longline sector contributes positively to household income ($0.67 per $1 increase in supply), the pelagic small boat fishery leads to reductions in household income (-$0.70 per $1 increase in supply). This reduction in income associated with the small boat sector is partially attributed to the quasi-recreational nature of the sector.