Regional Economic Impacts of Reductions in Fisheries Production: A Supply-Driven Approach

Abstract

Much debate and subsequent confusion have recently been generated regarding the economic importance of the longline fisheries for tuna and swordfish in Hawaii. Depending on the methodology employed, the measures of the economic importance of these fisheries to Hawaii can vary significantly. This paper attempts to provide an assessment of the alternative measures and their implications for fishery policy. In assessing the economic impact of the reduction in longline activities due to season and area closures as mandated by a recent court order, we suggest that the supply-driven approach is more appropriate. An empirical application using the supply-driven approach is used to estimate the economy-wide impacts of a 100% reduction in Hawaii-based longline activities. In addition, a set of supply-driven multipliers is derived for the other sectors of Hawaii's economy to allow comparison with the fishery sectors.