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Input-Output Model for Pacific Coast Fisheries, 2013 Revisions and Extensions
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Input-Output Model for Pacific Coast Fisheries, 2013 Revisions and Extensions Jerry Leonard Northwest Fisheries Science Center Fishery Resource Analysis and Monitoring Division 2725 Montlake Boulevard East Seattle, Washington 98112 April 2013 Acknowledgments There are several individuals to thank for their contributions to this effort. We thank Scott Steinback, Northeast Fisheries Science Center, for advice in modeling economic effects of recreational fishing; Brad Stenberg, Pacific Fisheries Information Network (PacFIN), who supplied fish ticket landings data and consultations about PacFIN related data issues; Erin Steiner and Abigail Hartley for assistance with EDC data; and Carl Lian for assistance with the voluntary cost earnings survey data. ii Abbreviations and Acronyms AKFIN BEA CDFG EDC IMPLAN IO IO-PAC NAICS NERIOM NMFS NWFSC ODFW PSMFC PacFIN WDFW WDOR Alaska Fisheries Information Network Bureau of Economic Analysis California Department of Fish and Game Economic Data Collection Program Impact Analysis for Planning (regional input-output software) input-output input-output model for Pacific Coast fisheries North American Industry Classification System Northeast Region Commercial Fishing Input-Output Model National Marine Fisheries Service Northwest Fisheries Science Center Oregon Department of Fish and Wildlife Pacific States Marine Fisheries Commission Pacific Fisheries Information Network Washington Department of Fish and Wildlife Washington Department of Revenue iii 1. Introduction The NWFSC’s Input-Output model for Pacific Coast Fisheries (IO-PAC) is designed to estimate the changes in economic contributions and economic impacts resulting from policy, environmental, or other changes that affect fishery harvest. IO-PAC was built by customizing the Impact Analysis for Planning (IMPLAN) regional input-output software. The original methodology employed in developing this model was similar to that used in the Northeast Fisheries Science Center’s Northeast Region Commercial Fishing Input-Output Model (Steinback and Thunberg, 2006). The development and design of IO-PAC is documented in detail in Leonard and Watson (2011). This paper presents recent updates to IO-PAC. The updates presented are part of an ongoing effort to continually improve the IO-PAC model with the latest available data and improvements in regional impact modeling capabilities. The updates of IO-PAC include incorporating more recent available data, the addition of a recreational fishing component, the addition of separate catcher processor and mothership sectors, and revisions to the model construction. As it stands currently, the model is not in its anticipated state for use in the 2015-2016 groundfish harvest specifications process. Several data sources that the model uses will be revised between the time of this writing and when the model is used in the groundfish harvest specifications process. Further discussion of the planned data updates is contained below, but in brief the planed updates include incorporating data collected through the Economic Data Collection program (EDC), the 2011 Marine Recreational Expenditure Survey, the 2009 and 2010 Limited Entry Fixed Gear Survey, the 2011 and 2012 Open Access Survey. Additionally, the planned updates will include 2012 Pacific Fisheries Information Network (PacFIN) fish ticket data. Nevertheless, at the time of this writing, IO-PAC makes use of the most recent data available, and the updates made since the first version of IO-PAC, provide insight into how these upcoming data sources will be incorporated into the model. The data updates made to date include the following. One, the underlying Impact Analysis for Planning (IMPLAN) data is changed from the 2006 base year to 2010. Two, the fish-ticket (landings) data from Pacific Fisheries Information Network (PacFIN) is changed from 2006 to 2010. Three, the commercial vessel production functions incorporate the latest data from the voluntary Limited Entry and Open Access Surveys conducted by the Norwest Fisheries Science Center. Four, it incorporates data collected as part of the EDC program for first receivers and shorebased processors. The addition of a recreational fishing component involves incorporating data collected on marine recreational expenditures (Gentner and Steinback, 2006), charter vessel cost earnings data collected by the Pacific States Marine Fisheries Commission and Southwest Fisheries Science Center (Pacific States Marine Fisheries Commission, 2004) and the Northwest Fisheries Science Center in 2006. 4 The revisions to IO-PAC construction are done to reduce effort involved in making changes to fishing sector production functions over time and simplify the process of building numerous port level models. 2010 IMPLAN data uses the Version 3 software update of IMPLAN. The original version of IO-PAC modified IMPLAN Version 2 software. Transitioning the unique fishing industry information in IO-PAC from IMPLAN Version 2 to Version 3, provides numerous initial obstacles, but ultimately enables a more efficient method to incorporate fishing sector production function changes and changing model study areas. 2. IMPLAN Data IMPLAN collects, organizes, and econometrically estimates the data that is necessary to construct regional economic impact models. These data, collectively referred to as the region’s social accounts, consist of purchases of inputs, labor, and capital by the respective sectors of the economy, the production of each sector, household demands in the region, sources of income of households in the region, taxes paid and government spending in the region, and the region’s imports and exports. IMPLAN constructs county-level social accounts based on a variety of data sources including the U.S. Census Bureau, U.S. Bureau of Economic Analysis (BEA), and employment and wages covered by unemployment insurance data. The current update to IO-PAC changes the underlying IMPAN data from 2006 to 2010. The IMPLAN data are used in IO-PAC to characterize the nonfishing economy of the regions such as the agricultural, manufacturing, trade, and service sectors, as well as the various institutions in the region such as households and governments. A major revision in the industry sectoring scheme was made in the 2008 IMPLAN data. In 2008 the IMPLAN data transitioned to 440 unique industry sectors from the 509 used in 2006. This change necessitated a new mapping of factor expenditures made by seafood harvesters and wholesalers into IMPLAN sectors. The new mapping scheme for the 440 IMPLAN sectors is presented in detail in Appendix A. 3. PacFIN Data The current update changes the fish-ticket data utilized by IO-PAC from 2006 to 2010. PacFIN data include fish ticket and vessel registration information that is supplied by California Department of Fish and Game (CDFG), Oregon Department of Fish and Wildlife (ODFW), and Washington Department of Fish and Wildlife (WDFW). Each time a commercial fishing vessel lands fish along the West Coast, it is documented by a fish ticket. For all commercial landings sold to shoreside wholesale fish dealers or processors, the fish buyers are required to fill out a fish ticket that describes the species, weight, and total price paid for the fish purchased. If a 5 commercial fishing harvester sells directly to consumers, the harvester is responsible for recording the receipts, filling out fish tickets, and remitting the information to the appropriate state agency. These data, when aggregated into vessel classifications and commodity types, comprise the total revenue or industry output estimates that are included in the model. PacFIN also contains information on the vessel identification of the seller, gear type used to catch the fish, date of transaction, and port where the fish were landed. Vessel registration information supplied by the states includes some physical characteristics such as length and engine horsepower. For this project, PacFIN personnel supplied data on pounds landed and revenue received by species, gear type, and port in 2010. Table 1 provides of a summary of the data that is currently used in IO-PAC, and its application. For commercial fishing vessels, it indicates that the PacFIN data are used in generating vessel production functions, estimates of total industry output (revenue), and total vessel employment. For processors the data are used in generating processor industry output and processor employment1. The IO-PAC update makes two changes in how the PacFIN data are used in the model. Previously, the length of the vessel, which is contained in PacFIN, was used in conjunction with moorage rates by length at a sample of ports along the West Coast to estimate average annual moorage expenditures by vessel classification. This approach to estimating moorage expenditures is no longer necessary due to changes in the NWFSC’s cost earnings surveys. The cost earnings surveys now directly query vessel owners about moorage expenditures. Additionally, PacFIN data is no longer used exclusively to assign vessels to the Radtke and Davis (2000) classification scheme. Because PacFIN contains fish-ticket data from only shoreside landings made on the West Coast, there are no landings data for Alaska fisheries vessels and at-sea vessels (motherships and catcher processors). In the last version of IO-PAC both of these vessel classifications were blank, so impacts could not be estimated for these sectors. In this update vessels are assigned to the Alaska category by using information derived from the Alaska Fisheries Information Network (AKFIN). For vessel IDs that appear in PacFIN, personnel from the Pacific States Marine Fishery Commission (PSMFC) provided data that indicates whether a vessel had landings in Alaska in 2008. Vessels with landings in Alaska were assigned to the Alaska fisheries vessel category. While the PacFIN data currently included in IO-PAC is from 2010, the data will be updated to 2012 prior to the use of the model for the 2015-2016 groundfish harvest specifications process. The model’s usage for groundfish specifications is expected to occur around the end of 2013. Table 1 presents the timeframe of expected data changes. The table indicates that the PacFIN data is expected to change to 2012 in the third quarter of 2013. 1 For a detailed discussion of how the PacFIN data fulfills these roles, see Leonard and Watson (2010). 6 Table 1. IO-PAC data sources and applications Data Year Expected Date Application Commercial Vessels Production Functions Vessel Industry Output Vessel Employment Open Access Survey (2009, 2008) Limited Entry Trawl Survey (2007, 2008) Limited Entry Fixed Gear Survey (2007, 2008) Marine Rec. Exp. Survey (2006) WA and OR Charter Vessel Survey (2006) West Coast Charter Vessel Survey (2000) EDC DATA (2010) 2008 2008 2008 2006 2006 2000 2010 Current Current Current Current Current Current Current X X X X X X X X Processors Production Functions Processor Industry Output Processor Employment 7 Recreational Fishing Expenditures Charter Prod. Functions Charter Industry Output Charter Employment Non-Fishing Data X X X X X X X X X X X X Table 1 (continued horizontally). IO-PAC data sources and applications Data Year Expected Date Application Commercial Vessels Production Functions Vessel Industry Output Vessel Employment Processors Production Functions Processor Industry Output Processor Employment IMPLAN PacFIN Fish Ticket Limited Entry Fixed Gear Survey (2009, 2010) Open Access Survey (2011, 2012) EDC Data (2011) PacFIN Fish Ticket 2010 2010 2010 2011 2011 2012 Current Current 2013 Q3 2013 Q3 2013 Q3 2013 Q3 X X X X X X X X X X X X X X X X X X X X X X X X 8 Recreational Fishing Expenditures Charter Prod. Functions Charter Industry Output Charter Employment Non-Fishing Data X X X 4. Commercial Fisheries Economic Data Cost earnings surveys provide the data necessary to construct the commercial fishing vessel and processor production functions. Since the last version of IO-PAC, the EDC program has been established as a data source for IO-PAC. Previously, the model relied solely on the voluntary limited entry trawl, limited entry fixed gear, and open access surveys for commercial fishery cost data. Currently, the commercial vessel production functions still rely exclusively on the most recent voluntary survey data. Following the schedule in Table 1, a transition will be made to the EDC data for limited-entry trawl, catcher processors, motherships and shorebased processors. For shorebased processors, processors, preliminary data from the EDC survey is already incorporated into IO-PAC. 4.1. Voluntary Cost-Earnings Surveys The vessel production functions are currently using data from the most recent voluntary limited entry trawl survey, limited entry fixed gear survey, and open access survey. Since the first version of IO-PAC was completed, all three surveys have been reprised. The updated results have been incorporated into IO-PAC. Because of the expanded scope and increased detail of the more recent surveys, incorporating the data has the added benefit of likely increasing the accuracy of IO-PAC, especially for vessel classifications that were previously not covered or partially covered. The expanded scope is the result of a changed target population of the open access survey. The increased detail is the result of an increased number of cost categories for all the voluntary surveys. These additional cost categories permit improved specification of the production functions. Previous costs categories used in the model included fuel and oil; food and crew provisions; ice; bait; repairs, maintenance, and improvements; insurance; permit leases; permit purchases; interest and financial services; crew expense; and captain expense. The new additional cost categories include moorage, enforcement, dues, offloading, and trucking. Responses to the surveys can be easily matched to vessel landings by species, gear type, physical characteristics, and permit information contained in PacFIN. A short description of the surveys follows2. The survey population for the limited entry trawl survey consisted of all vessels with a limited entry trawl permit and at least $1,000 in landings in 2008. The survey collected information for 2007 and 2008 through in-person interviews. There were 73 completed responses out of a total of 127 vessels for a response rate of 57%. Using a modified version of the vessel classification scheme suggested by Radtke and Davis (2000), shown in Table 3, the 2 For a more detailed description of the survey programs and summary statistics used in constructing the production functions, see the forthcoming NOAA Technical Memoranda by Lian. principle classification of respondents was large groundfish trawler, and other vessel classifications covered were Alaska, whiting, crabber and shrimper. The survey population for the limited entry fixed gear survey consisted of all vessels with a limited entry fixed gear permit and at least $1,000 in landings in 2008. This survey also collected information for 2007 and 2008, and used in-person interviews. There were 57 completed responses out of a total of 125 vessels for a response rate of 46%. The principle classification of respondents was sablefish (Anoplopoma fimbria) fixed gear, and other vessel classifications covered were Alaska, crabber, other groundfish fixed gear, and other < $15,000. The survey population for the open access survey consisted of all commercial fishing vessels that: 1) landed at least $1,000 of salmon, groundfish, crab or shrimp at West Coast ports during 2008, 2) had at least one trip on which groundfish, salmon, crab or shrimp accounted for a majority of revenue from landings, and 3) did not hold a limited entry permit. Survey data was collected via in-person interviews and mail questionnaires. The population of targeted vessels for the most recent survey was expanded considerably from the 2005 and 2006 version because of the addition of crab and shrimp to the first two requirements. There were 1,712 vessels that met the above three requirements. There were 1,098 vessels for which a telephone and address was obtainable. There were 437 completed responses for a response rate of 39.8% among those vessels where contact information was available. Responses came from vessels classified as Alaska, crabber, sablefish fixed gear, other groundfish, salmon troller, salmon netter, shrimper, and other less than $15,000. 4.2. Mandatory EDC Surveys In January 2011, the West Coast groundfish trawl fishery transitioned to a new, management approach known as a Catch Share Program. The Catch Share Program consists of an individual fishing quota (IFQ) program for the shorebased trawl fleet and cooperative programs for the at-sea mothership and catcher/processor trawl fleets. The economic benefits of the West Coast groundfish trawl fishery and their distribution will likely change under trawl rationalization. To monitor these changes, the rationalization program includes a mandatory economic data collection program. Using data collected from industry members, the EDC program monitors whether the goals of the Catch Share Program have been met. The EDC program will also help meet the requirements of the Magnuson-Stevens Act for catch share evaluation. The regulations detailing the Economic Data Collection program are available in 50CFR 660.114. The EDC program collects vessel/plant characteristics, capitalized investments, annual expenses, annual earnings, crew/labor payments, and quota and permit expenses from the following types of businesses. Limited Entry Trawl Catcher Vessels - All owners, lessees, and charterers of a catcher vessel registered to a limited entry trawl endorsed permit. 2 Motherships - All owners, lessees, and charterers of a mothership vessel registered to a mothership permit. Catcher/Processors - All owners, lessees, and charterers of a catcher processor vessel registered to a catcher/processor-endorsed limited entry trawl permit. First Receivers/Shorebased Processors - All owners and lessees of a shorebased processor that received round or headed-and-gutted IFQ species groundfish or whiting from a first receiver, and all owners of a first receiver site license in 2011 and beyond. The inclusion of data collected through the EDC program in IO-PAC is currently underway. When fully implemented following the schedule in Table 1 the EDC data will be used for several purposes in IO-PAC. For the shoreside trawl catcher vessel fleet, the EDC data will replace the voluntary trawl survey data currently in use. Additionally, it will provide the first cost earnings data to permit the inclusion of the at-sea fleet (motherships and catcher processors) in the model. Lastly, it will provide the data necessary to replace the default IMPLAN approach to generating shorebased processing employment, industry output (revenue), and production function used in the previous version IO-PAC. The last of these purposes, is currently operational in IO-PAC. The default IMPLAN processor approach used in the previous version of IO-PAC had notable disadvantages, particularly that all species contained in IO-PAC were limited to the same markup to develop processor impacts. Consequently, improving the processor specification in IO-PAC was given priority. 5. The IO-PAC Model Several aspects of the IO-PAC model are modified in the revision. To the existing vessel classification scheme in IO-PAC, the revision adds vessel sectors for motherships, catcher processors, and charter recreational fishing vessels. The underlying product flow assumptions are changed. The commercial vessel production functions are changed through the inclusion of more recent cost earnings data. Processor sector production functions and estimates of appropriate processor markups for different species are altered through the use of EDC data. Lastly, a recreational module is added to enable impact and contribution estimates of recreational fishing. 5.1. Industry/Commodity Scheme The revised industry classification scheme modifies the Radtke and Davis (2000) vessel classification scheme by separating motherships and catcher processors and adding a sector for recreational charter vessels. In the Radtke and Davis (2000) sector scheme motherships and catcher processors are grouped together. In the revision they are separated into two industry 3 classifications. The addition of a sector for recreational charter vessels is discussed in detail in Section 5.5 below. The IO-PAC codes for the industry sectors included in the model are displayed in Table 2. The classification rules for the commercial fleet are presented in Table 3. The classification scheme is hierarchical. Working from the top down, the rule description of the category that is met, is the classification for a vessel. Table 2. Industry categories and associated IMPLAN codes. IO-PAC Code 509 510 511 512 513 514 515 516 517 518 519 520 521 522 523 524 525 526 527 528 561 563 570 Category description Catcher processor Mothership Alaska fisheries vessel Pacific whiting trawler Large groundfish trawler Small groundfish trawler Sablefish fixed gear Other groundfish fixed gear Pelagic netter Migratory netter Migratory liner Shrimper Crabber Salmon troller Salmon netter Other netter Lobster vessel Diver vessel Other, more than $15,000 Other, less than $15,000 Bait ship Wholesale seafood dealers Recreational charter 4 Table 3. Vessel sectors used in the IO-PAC. Modified from Radtke and Davis (2000). Order 1 2 3 4 Vessel sector Catcher processor Mothership Alaska fisheries vessel Pacific whiting offshore and onshore trawler 5 Large groundfish trawler 6 Small groundfish trawler 7 Sablefish fixed gear 8 Other groundfish fixed gear 9 Pelagic netter 10 Migratory netter 11 Migratory liner 12 Shrimper 13 Crabber 14 Salmon troller 15 Salmon netter 16 Other netter 17 Lobster vessel 18 Diver vessel 19 20 Other > $15,000 Other ≤ $15,000 Rule description Vessel registered to a catcher processor permit. Vessel registered to a mothership permit. Alaska revenue is > 50% of vessel’s total revenue. Pacific whiting (Merluccius productus) PacFIN revenue plus U.S. West Coast offshore revenue is > 33% of vessel total revenue and total revenue is > $100,000. Groundfish (including sablefish, halibut, and California halibut [Paralichthys californicus]) revenue from other than fixed gear is > 33% of vessel total revenue and total revenue is > $100,000. Groundfish (including sablefish, halibut, and California halibut) revenue from other than fixed gear is > 33% of vessel total revenue and total revenue is > $15,000. Sablefish revenue from fixed gear is > 33% of vessel total revenue and total revenue is > $15,000. Groundfish (including halibut and California halibut), other than sablefish, revenue from fixed gear is > 33% of vessel total revenue and total revenue is > $15,000. Pelagic species revenue is > 33% of vessel total revenue and total revenue is > than $15,000. Highly migratory species revenue from gear other than troll or line gear is > 33% of vessel total revenue and total revenue is > $15,000. Highly migratory species revenue from troll or line gear is > 33% of vessel total revenue and total revenue is > $15,000. Shrimp revenue is > 33% of vessel total revenue and total revenue is > $15,000. Crab revenue is > 33% of vessel total revenue and total revenue is > $15,000. Salmon revenue from troll gear is > 33% of vessel total revenue and total revenue is > $5,000. Salmon revenue from gill or purse seine gear is > 33% of vessel total revenue and total revenue is > $5,000. Other species revenue from net gear is > 33% of vessel total revenue and total revenue is > $15,000. Lobster revenue is > 33% of vessel total revenue and total revenue is > $15,000. Revenue from sea urchins, geoduck (Panopea abrupta), or other species by diver gear is > 33% of vessel total revenue and total revenue is > $5,000. All other vessels not above with total revenue > $15,000. All other vessels not above with total revenue ≤ $15,000. 5 The IO-PAC revision does not alter the commodities added to IMPLAN. The commodities are displayed in Table 4, and include 32 different species/gear combinations as well as one bait commodity. The gear type portion of the commodity classification was constructed by grouping PacFIN fish ticket data with the gear categories presented in Table 5. Table 4. Commodities added to IMPLAN and associated codes. IO-PAC Code 529 530 531 532 533 534 535 536 537 538 539 540 541 542 543 544 545 546 547 548 549 550 551 552 553 554 555 556 557 558 559 560 562 Species and gear combinations Whiting, at sea Whiting, trawl Whiting, fixed gear Sablefish, trawl Sablefish, fixed gear Dover/thornyhead, trawl Dover/thornyhead, fixed gear Other groundfish, trawl Other groundfish, fixed gear Other groundfish, net Crab, trawl Crab, fixed gear Crab, net Crab, other gear Shrimp, trawl Shrimp, fixed gear Salmon, trawl Salmon, fixed gear Salmon, net Highly migratory species, fixed gear Highly migratory species, net Coastal pelagic species, trawl Coastal pelagic species, fixed gear Coastal pelagic species, net Coastal pelagic species, other gear Halibut, trawl Halibut, fixed gear Halibut, net Other species, trawl Other species, fixed gear Other species, net Other species, other gear Bait 6 Table 5. Gear groupings and associated PacFIN variables. IO-PAC Trawl Trawl Fixed gear Fixed gear Fixed gear Fixed gear Net Other gear Other gear Gear ID TWL TWS NTW HKL TLS POT NET MSC DRG Description Trawls except shrimp trawls Shrimp trawls Nontrawl gear Hook and line gear except troll Troll gear Pot and trap gear Net gear except trawl Other miscellaneous gear Dredge gear The total landings by vessel type and species/gear combinations are displayed in Table 6. Landings are classified in the species/gear classifications even if species for particular gear types are considered bycatch. 7 Table 6. Landings by vessel type and commodity code, 2010 value ($). IMPLAN code 529 530 531 532 533 534 535 536 537 538 539 540 541 542 543 544 545 546 547 548 549 550 551 552 553 554 555 556 557 558 559 560 Species and gear combinations Whiting, at sea Whiting, trawl Whiting, fixed gear Sablefish, trawl Sablefish, fixed gear Dover/thornyhead, trawl Dover/thornyhead, fixed gear Other groundfish, trawl Other groundfish, fixed gear Other groundfish, net Crab, trawl Crab, fixed gear Crab, net Crab, other gear Shrimp, trawl Shrimp, fixed gear Salmon, trawl Salmon, fixed gear Salmon, net HMS, fixed gear HMS, net CPS, trawl CPS, fixed gear CPS, net CPS, other gear Halibut, trawl Halibut, fixed gear Halibut, net Other species, trawl Other species, fixed gear Other species, net Other species, other gear Total 509 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 510 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 511 Vessel classification 512 513 514 515 $4,651,749 $4,252,637 $819,717 $193,316 $509,429 $1,882,378 $248,490 $7,761 $219,327 $17,446 $306,187 $175,820 $256,511 $238 $261,608 $266 $58,540 $2,574,985 $335,784 $9,586,355 $318,032 $6,825,393 $4 $7,171,143 $880 $1,478 $550 $5,527,716 $8,810 $285,748 $691 $1,411 $1,198 $44,282 $3,380 $297,531 $58,581 $3,205,428 $5,314 $18,449 $132,135 $202,436 $47,262 $244 $10,298 $759 516 $91 $6,255 $897,014 $56,973 $17,245,631 $390,801 $499,013 $431 $742,018 $0 $1,459,018 $502 $1,778,712 $6,097,718 $706,010 $4,878 $4,773 $21,169 $321 $905,142 $497,963 $599,921 $22,032 $24,764 $113,702 $143 $1,645 $1,206 $3,635 $1,012,898 $38 $2,736,461 $212 $1 $67,496 $8,046 $184 $7,309,739 $33,886 $3,430 $70 $1,538,448 $5,727 $1,013 $1,707 $2,642 $12,916,233 $5,653,704 8 $901,739 $35,892 $92,185 $94,573 $554 $10,969 $293,171 $11,043 $67,189 $58,817 $1,240 $62,545 $34,954,438 $1,180,402 $211 $82,822 $1,178 $94,978 $27,816,025 Table 6 continued horizontally. Landings by vessel type and commodity code, 2010 value ($). IMPLAN code 529 530 531 532 533 534 535 536 537 538 539 540 541 542 543 544 545 546 547 548 549 550 551 552 553 554 555 556 557 558 559 560 Species and gear combinations Whiting, at sea Whiting, trawl Whiting, fixed gear Sablefish, trawl Sablefish, fixed gear Dover/thornyhead, trawl Dover/thornyhead, fixed gear Other groundfish, trawl Other groundfish, fixed gear Other groundfish, net Crab, trawl Crab, fixed gear Crab, net Crab, other gear Shrimp, trawl Shrimp, fixed gear Salmon, trawl Salmon, fixed gear Salmon, net HMS, fixed gear HMS, net CPS, trawl CPS, fixed gear CPS, net CPS, other gear Halibut, trawl Halibut, fixed gear Halibut, net Other species, trawl Other species, fixed gear Other species, net Other species, other gear Total 517 518 519 Vessel classification 520 521 522 523 $75,375 $61,822 $424 $538 $39,826 $1,881 $76 $914,489 $6,674 $145 $93,967 $71,041 $140,366 $3 $68,998 $15,547 $738 $995 $5,708,325 $102,250,685 $49,369 $11,810,093 $4,222,313 $53,646 $345,734 $1,245,050 $4,557 $50,232 $932,428 $1,860 $23,936,734 $55,430 $46 $59,222 $71,357 $5,853 $35 $2,447,369 $6,035,306 $4,099,394 $3,647,338 $108,360 $237,555 $120,968 $109 $45 $660 $562,560 $185 $1,569,625 $54,673 $209 $12,611 $14 $5,504,969 $52 $626 $5,040 $13,440,855 $392 $8,303 $13,293 $39,196 $71,143,799 $86,833,939 $49,187 $4,052,348 $12,630 $3,214 $239,975 $165,632 $57,981 $29,675 $3,929 $328,537 $298,467 $666,325 9 $1,611,343 $191,171 $65,830 $32,541,679 $36,803 $64,248 $383 $108,068 $877,854 $88,306 $892 $23,445,453 $434 $170,607 $27 $13 $55,673 $73,203 $1,100,042 $182,066 $29,065,941 $39,749 $146,846 $161,830 $4,148 $820,951 $185,773 $394 $20 $370,701 $123,246,673 $4,310,045 $30,970,157 Table 6 continued horizontally. Landings by vessel type and commodity code, 2010 value ($). IMPLAN code 529 530 531 532 533 534 535 536 537 538 539 540 541 542 543 544 545 546 547 548 549 550 551 552 553 554 555 556 557 558 559 560 Species and gear combinations Whiting, at sea Whiting, trawl Whiting, fixed gear Sablefish, trawl Sablefish, fixed gear Dover/thornyhead, trawl Dover/thornyhead, fixed gear Other groundfish, trawl Other groundfish, fixed gear Other groundfish, net Crab, trawl Crab, fixed gear Crab, net Crab, other gear Shrimp, trawl Shrimp, fixed gear Salmon, trawl Salmon, fixed gear Salmon, net HMS, fixed gear HMS, net CPS, trawl CPS, fixed gear CPS, net CPS, other gear Halibut, trawl Halibut, fixed gear Halibut, net Other species, trawl Other species, fixed gear Other species, net Other species, other gear Total 525 524 526 Vessel classification 527 $11,016 $13 $7 $6,068 $2,060 $65,808 $52 $1,048 $59,206 $9,714 $438,579 $188 $54,056 $158,147 $3,636 $149,770 $5,715 $58,444 $645 $7,675 $696 $15,391 $35,767 $168,020 $203 $306,862 $3,370,252 $4,137,277 $60 $1,936 $9,897,530 $74,503 $77,842 $10,926,681 10 $431,702 $4,939 $15,967 $712,117 $1,152 $42 $40,616 $101,290 $6,480 $252 $72,491 $489,636 $70,200 $414,247 $1,916,609 $322,656 $10,178 $168 $50,827 $1 $23,300 $435,256 $24,870 $4,511 $450,556 $232,412 $429,818 $7,225,366 $17 $34,432 $173,358 $4,807 $13,899 $33,905 $3,454 $2,039 $7,359 $7,877 $71 $1,612 $253,599 $1,514,385 $1,169 $49,634 $5,579 $172,460 $1,425 $837 $13,366 528 $30,887 $29,164 $44,708 $12,616 $7,466 $42 $7,919,127 $8,104,596 $263,883 $2,440,575 $142,203 $108,510,837 $112,546,073 Total all classifications $0 $9,935,110 $111 $10,619,625 $25,083,923 $7,520,781 $1,984,416 $8,271,059 $3,564,469 $9,235 $4,355 $132,687,282 $19,497 $155,077 $15,885,826 $5,851,547 $0 $8,695,124 $40,857,123 $29,779,359 $75,109 $3,491 $13,227 $13,622,302 $1 $1,376,443 $7,586,057 $395,643 $568,692 $16,609,802 $76,212,145 $117,397,975 $534,784,804 5.2. Commercial Catcher-Vessel Production Functions The vessel production functions in IO-PAC rely on the 2008 data from the voluntary limited entry trawl, fixed gear, and open access surveys. Table 7 presents the vessel production functions included in IO-PAC. Because these voluntary surveys do not extend to the at-sea fishery, the mothership and catcher processor production functions are left blank at this time. The expenditure categories shown in Table 7 must be mapped into IMPLAN commodity codes for inclusion in the model. The mapping of the expenditure categories into IMPLAN commodity codes is presented in detail in Appendix A. While the expenditure categories have changed little in the IO-PAC update, the mapping to IMPLAN commodity codes has changed considerably due to the shift in the IMPLAN industry classification scheme from 509 unique sectors to 440. 5.3. Motherships and Catcher Processor Production Functions The EDC is currently collecting data applicable to the at-sea fleet: motherships and catcher processors. Cost earnings surveys necessary to create production functions for these vessels were previously unavailable. These production functions will be assigned the EDC data following the schedule in Table 1. 11 Table 7. Percentage distribution of commercial fishing production functions by expenditure categories. 12 Expenditure categories (table continued horizontally below) Captain Crew Fuel, lubricants Food, crew provisions Ice Bait Repair and maintenance: vessel, gear, equipment Insurance Interest and financial services Purchases of permits Leasing of permits Moorage Landings taxes Enforcement Dues Freight Supplies Offloading Trucking Other miscellaneous Proprietary income Total (%) Catcher processor — — — — — — — Mothership — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — Alaska 13.4 19.6 13.2 1.4 0.1 0.8 Pacific whiting trawler 12.3 17.8 12.8 1.6 0.8 1.0 Large groundfish trawler 17.5 21.6 16.8 1.5 1.4 0.8 Small groundfish trawler 17.5 21.6 16.8 1.5 1.4 0.8 Sablefish fixed gear 21.6 23.7 7.4 2.0 1.2 4.4 Other groundfish fixed gear 18.3 21.5 7.5 1.9 1.1 4.3 Migratory liner 16.6 18.1 8.3 1.2 0.7 2.8 Pelagic netter 16.6 18.1 8.3 1.2 0.7 2.8 8.7 3.2 0.4 1.7 0.6 0.8 0.7 0.5 0.1 0.0 0.0 0.0 1.1 33.6 100.0 11.3 5.4 1.7 0.1 0.0 0.7 4.3 1.1 0.3 0.0 0.0 0.0 1.1 27.7 100.0 14.3 4.6 1.1 0.5 0.5 0.7 4.4 0.4 0.9 0.0 0.0 0.0 2.8 10.2 100.0 14.3 4.6 1.1 0.5 0.5 0.7 4.4 0.4 0.9 0.0 0.0 0.0 2.8 10.2 100.0 10.7 2.8 2.1 0.5 2.1 2.4 0.1 1.1 0.3 0.0 0.0 0.0 2.4 15.0 100.0 12.4 5.9 1.8 2.6 0.2 1.6 0.0 0.7 0.0 0.6 1.0 1.1 6.7 10.8 100.0 10.4 3.6 1.1 0.9 0.5 1.2 1.1 0.4 0.3 0.1 0.2 0.2 4.7 27.5 100.0 10.4 3.6 1.1 0.9 0.5 1.2 1.1 0.4 0.3 0.1 0.2 0.2 4.7 27.5 100.0 Table 7 continued horizontally. Percentage distribution of commercial fishing production functions by expenditure categories 13 Expenditure categories (column Migratory list repeated from above) netter Shrimper Captain 16.6 20.8 Crew 18.1 17.7 Fuel, lubricants 8.3 2.3 Food, crew provisions 1.2 13.4 Ice 0.7 1.2 Bait 2.8 2.2 Repair and maintenance: vessel, gear, and equipment 10.4 7.5 Insurance 3.6 4.4 Interest and financial services 1.1 0.0 Purchases of permits 0.9 0.0 Leasing of permits 0.5 0.0 Moorage 1.2 3.0 Landings taxes 1.1 1.2 Enforcement 0.4 0.3 Dues 0.3 0.2 Freight Supplies 0.1 0.4 Offloading 0.2 0.5 Trucking 0.2 0.0 Other miscellaneous 4.7 0.4 Proprietary income 27.5 24.4 Total (%) 100.0 100.0 *Percentages not shown due to confidentiality restrictions Crabber 21.4 21.6 6.9 1.1 0.4 4.4 Salmon troller 7.5 17.2 9.9 3.0 0.3 0.2 Salmon netter 19.0 8.2 1.4 4.3 0.0 0.0 Other netter 16.6 18.1 8.3 1.2 0.7 2.8 Lobster 16.6 18.1 8.3 1.2 0.7 2.8 Diver 16.6 18.1 8.3 1.2 0.7 2.8 Other >15,000 16.6 18.1 8.3 1.2 0.7 2.8 Other <15,000 17.9 13.3 17.6 3.6 1.0 2.7 11.3 4.2 1.0 1.2 0.4 1.2 0.1 0.1 0.2 0.1 0.4 0.2 8.2 15.6 100.0 15.6 5.0 3.1 3.2 0.3 3.2 0.0 0.3 0.8 0.0 0.0 0.6 10.7 19.1 100.0 17.7 2.2 0.0 0.2 0.3 0.8 1.0 0.0 0.5 0.0 0.5 1.7 3.3 38.9 100.0 10.4 3.6 1.1 0.9 0.5 1.2 1.1 0.4 0.3 0.1 0.2 0.2 4.7 27.5 100.0 10.4 3.6 1.1 0.9 0.5 1.2 1.1 0.4 0.3 0.1 0.2 0.2 4.7 27.5 .100.0 10.4 3.6 1.1 0.9 0.5 1.2 1.1 0.4 0.3 0.1 0.2 0.2 4.7 27.5 100.0 10.4 3.6 1.1 0.9 0.5 1.2 1.1 0.4 0.3 0.1 0.2 0.2 4.7 27.5 100.0 27.0 4.7 0.6 5.9 0.3 8.4 0.0 0.7 0.8 0.0 0.1 1.1 6.5 -12.1 100.0 5.4. Shoreside processor production functions and mark-ups For shoreside processors located on the West Coast, the EDC data permits the building of a production function and mark-up by species. The Benchmark Input-Output data produced by the Bureau of Economic Analysis (BEA) contains a production function for seafood processors, which is used in IMPLAN for the default seafood processing sector. This production function is not specific to processors on the West Coast, so to the extent that processors on the West Coast differ from seafood processors nationally, the use of the Benchmark Input-Output production function will be a source of error. In the last version of IO-PAC, shoreside processor sales of seafood were made by using the markup margin information imbedded in the IMPLAN default seafood processing production function. Additionally, the output per-employee information in the default production function was used to make employment estimates. This previous approach has a couple of notable disadvantages. First, it is derived from data on all U.S. processors. The national data is heavily influenced by the processing activity that occurs in Alaska, where the production costs for fish and output per employee are likely different than shoreside seafood processors on the West Coast. To the extent that West Coast shoreside processors deviate from the processors nationally, there will be errors in both income and employment impact estimates. Second, the markup margin in the default approach is not species specific. While this approach will approximate the markup received by processors for all species on average, it lacks species specific detail. Based on the EDC data, markups differ substantially among different species. The EDC data permits the specification of a production function specific to processors on the West Coast, and perhaps more importantly, it provides information on species specific markup for different fish species. IO-PAC uses data collected through the EDC to represent all shoreside processors on the West Coast. Using the EDC data in this application is a potential source of error, because not all processors of on the West Coast are required to complete a survey. An EDC survey is required of all owners and lessees of a shorebased processor that received round or headed-and-gutted IFQ species groundfish or whiting from a first receiver, and 3 all owners of a first receiver site license in 2011 and beyond. Processors that do not receive fish fitting this description are not included in the EDC program. Thus, no cost data is available for them. Because the lack of available data, we assume that all West Coast shoreside processors are represented by those who complete an EDC survey. The processor production function was generated through dividing each of the expenditures displayed in Table 8 by total revenue. The production function is built using 2010 data. The mapping of the cost categories into the appropriate IMPLAN sectors is detailed in Appendix A. The default production function in IMPLAN, which is based on the BEA’s inputoutput table, is useful in mapping expenditure categories covered in the EDC to the appropriate commodity codes. 3 For a complete definition see 50 CFR 660.114. Under NAICS some of these entities may be classified as fish and seafood merchant wholesalers, frozen specialty food manufacturing, or something else. For the purposes of IO-PAC they are considered processors. 14 Table 8. Percentage distribution of processor production functions by expenditure categories. Expenditure categories Employee and Worker Payroll Additives Custom Processing Electricity Freight Insurance Natural Gas Offsite storage and freezing Packaging Production Supplies Propane Rental or lease of buildings, job-site trailers, and other structures Rental or lease of processing machinery or equipment Repair and maintenance on facility buildings, machinery, and equipment Sewer and Waste Shoreside monitor Water Fish purchases Other Proprietary Income Total (%) Allocation Percent 14.02 0.22 1.19 1.31 0.57 0.97 0.34 1.25 3.99 0.84 0.29 0.89 0.18 1.75 0.31 0.15 0.65 59.93 1.99 9.15 100.0 Costs by category in Table 8 were allocated to relevant cost categories in the default production function in proportion to their share in the default production function. The Benchmark Input-Output Table (BIOT) may have more than one category relevant to each EDC cost category. In other words, BIOT has greater detail about a specific cost category than is captured by the EDC. Information related to the use of these commodities by seafood processors is contained in their default production function in IMPLAN. For example, commodity codes relevant to the EDC category “Packaging” are shown in Table 9. The default production function contains five categories that are applicable. These are the five industry categories that are involved in the production of a commodity that is likely used to make “Packaging.” The default absorption numbers in the table are the allocation percentages of total industry output (revenue) to the respective expenditure categories. These percentages are used to guide the allocation of the EDC category “Packaging.” The IO-PAC allocation is done in proportion to the default absorption. Table 9. IO-PAC distribution of processor cost example. IMPLAN Code Expenditure categories 3107 3108 3105 3146 Paperboard containers Coated and laminated paper, packaging paper and plastics film Paper from pulp Polystyrene foam products 15 Default Absorption IO-PAC Allocation Percent 1.668 0.289 0.019 0.010 80.335 13.924 0.910 0.477 100.0 The markups by species groups contained in IO-PAC are shown in Table 10. The markups were generated using 2010 EDC data. The markups shown on the basis of revenue earned by processors for every dollar spent on the respective species. Table 10. IO-PAC processor markups by species group. Expenditure categories Whiting Sablefish Dover/thornyhead Other groundfish Crab Shrimp Salmon HMS CPS Halibut Markup 3.63 1.61 2.33 1.60 1.48 1.91 1.28 1.16 2.23 1.28 5.5. Recreational Fishing The IO-PAC revision includes a new module to estimate economic impacts and contributions related to recreational fishing trips. Recreational expenditures by type and by fishing mode were obtained from Gentner and Steinback (2008). Table 11 shows the recreational expenditures by type and mode. Table 11. Estimated 2006 Recreational Expenditures by Mode (Thousands of 2006 dollars) California Expenditure Category Access and Parking Auto Rental Bait Boat and Equipment Rental Boat Fuel Catch Processing Charter Crew Tips Charter Fees Food from Grocery Stores Food from Restaurants Gifts Ice Lodging Private Transport Public Transport Tackle Tournament Fees Trip Total Oregon Charter 771 1,976 223 24 0 157 4,355 47,790 6,084 7,081 2,244 892 6,851 15,950 2,130 12,039 1,643 Private 995 0 4,893 8,021 22,587 0 0 0 10,846 5,698 1,243 1,602 4,505 19,182 1,382 16,010 250 Charter 21 15 13 25 0 24 191 6,095 526 1,059 268 50 1,138 1,638 158 90 3 110,210 97,214 11,316 16 Washington Private Charter 173 8 8 0 1,663 24 1,668 9 5,783 0 324 70 0 353 0 6,223 4,764 828 3,423 941 650 266 666 56 5,897 1,113 8,652 1,709 666 86 4,388 132 62 110 38,786 11,929 West Coast Private Charter 59 800 101 1,991 298 260 721 58 2,064 0 7 251 0 4,899 0 60,108 948 7,438 625 9,081 105 2,778 126 998 632 9,102 1,216 19,297 220 2,374 895 12,261 72 1,756 8,087 133,455 Private 1,227 109 6,854 10,410 30,434 331 0 0 16,558 9,746 1,998 2,394 11,034 29,050 2,268 21,293 384 144,087 Angler expenditures in Table 11 were used to create expenditure vectors for calculating economic contribution and impacts associated with changes in recreational spending. Expenditures by category were divided by total trip expenditures by mode and state to apportion recreational spending among different IMPLAN and IO-PAC sectors. The expenditure vectors for West Coast charter and private boat anglers along with their associated IMPLAN and IOPAC sectors are displayed in Table 124. The percentages represent the proportion of total recreational expenditures by mode on each expenditure category. For example, for each dollar of spending on charter boat fishing on the West Coast, $0.45 is spent on charter fees and $0.068 is spent on lodging. Table 12. West Coast Expenditure Vector by Mode and Associated IMPLAN/IO-PAC Sectors West Coast (%) Expenditure Category Access and Parking Auto Rental Bait Boat and Equipment Rental Boat Fuel Catch Processing Charter Crew Tips Charter Fees Food from Grocery Stores Food from Restaurants Gifts Ice Lodging Private Transport Public Transport Tackle Tournament Fees IMPLAN/IO-PAC Sector (Basis) Charter Private 0.6 0.9 Other amusement and recreation (Industry) 1.5 0.1 Automotive equipment rental and leasing (Industry) 0.2 4.8 Animal production, except cattle and poultry and eggs (Commodity) 0.0 7.2 General and consumer goods rental (Industry) 0.0 21.1 Petroleum refineries (Commodity) 0.2 0.2 Seafood product preparation and packaging (Industry) 3.7 0.0 Charter vessels (Industry) 45.0 0.0 Charter vessels (Industry) 5.6 11.5 Personal consumption expenditure vector 1111 6.8 6.8 Food services and drinking places (Industry) 2.1 1.4 All other miscellaneous manufacturing (Commodity) 0.7 1.7 Soft drink and ice manufacturing (Commodity) 6.8 7.7 Hotels and motels, including casino hotels (Industry) 14.5 20.2 Petroleum refineries (Commodity) 1.8 1.6 Transit and ground passenger transportation (Industry) 9.2 14.8 Sporting goods and athletic goods mfg. (Commodity) 1.3 0.3 Other amusement and recreation (Industry) The expenditure vectors can be used to calculate contribution and impact estimates from recreational trip spending. To use the expenditure vector, effort estimates must be transformed to recreational spending. Effort estimates are mapped into recreational spending for each state using the expenditure estimates in Table 11 in conjunction with effort measured in number of trips obtained from Gentner and Steinback (2008). Expenditures by state were divided by trips to obtain state level mean expenditures per trip and mode. The mean expenditures by trip are then adjusted to meet the year of analysis by using Consumer Price Index data for the following goods and services: recreation, car rental, processed fish, motor fuel, food and beverages, 4 The same procedure for charter and private boat anglers could be performed for shoreside anglers, which would enable economic impact estimates for this segment. This has not been done because there has not been a need, as yet, to make impact estimates for shoreside anglers. 17 sporting goods, lodging, private transportation, public transportation, and miscellaneous personal. Using mean expenditures by trip in conjunction with total recreational trip estimates yields expected changes in recreational spending. The expenditure vectors and mean recreational expenditures can be used for contribution and impact estimates for the sub-state level port areas in IO-PAC under the assumption that recreational spending within a port area does not differ from the state averages. For example, this assumes a recreational angler in Puget Sound purchases the same basket of goods and services as a recreational angler who fishes off the Washington coast. There is therefore a potential source of error in applying the expenditure vectors to all port areas within each state. Expenditures in some port areas could deviate from the state-level expenditure vectors. However, to make sub-state level estimates this assumption is necessary because it is unknown how expenditures differ among port areas. By assuming the same expenditure profile for each port area in a state, differences in the economic effects of changes in recreational spending are driven by changes in recreational fishing trips in each area and differences in their respective regional economies rather than differences in the types of goods purchased in each region. A "charter vessel" is not contained in the default version of IMPLAN. In the standard IMPLAN model, the charter vessel industry is included in “Other amusement, gambling, and recreation industries” (IMPLAN sector 410), along with many other diverse industries. This IMPLAN sector includes charter vessel operations, but it also includes other important industries such as skiing. It was added using an approach similar to that used for adding the commercial fishing sectors. The results from surveys of charter vessels in CA, OR, and WA were used to create production functions for charter businesses. In addition, survey results were used to create total industry output, employment, employee compensation, proprietor income and taxes paid. For every dollar of output, amounts are paid to providers of inputs from other sectors, so that every dollar of charter vessel output can be broken into material input costs and value above costs of inputs, which is value-added The WA and OR charter sectors were created using the results of a 2006 survey of marine charter fishing businesses in WA and OR by the Northwest Fisheries Science Center5. The marine charter survey collected information about cost and revenue, vessel characteristics, operator characteristics, and current market conditions in the industry. The marine charter fishing industry in Washington and Oregon consisted of an estimated 217 vessels in 2006 with $15.4 million in direct revenue and employed an estimated 345 individuals. Completed surveys were received from 95 ocean going vessels in 2006. Seven surveys were incorrectly completed and were treated as nonresponses. The effective sample was 53 vessels in Oregon and 35 vessels in Washington for a total survey response rate of 41%. Total revenues estimated from the survey were adjusted by effort changes from 2006 to 2008 and were added to the model as total industry output. To bring estimated industry revenue to the 2008 base year of the revised IO-PAC model, effort changes of for-hire fishing trips from 2006 to 2008 from “Fisheries Economics of the United States 2009” were used. Total industry 5 The survey methodology and complete results will appear in a forthcoming manuscript by Leonard and Watson: “The role of charter boat operations in fishing communities: a social and economic analysis of the marine charter boat fleets in Oregon and Washington.” The manuscript is obtainable from the author by request. 18 output was apportioned to value added and material components as displayed in Table 13 along with their associated IMPLAN sectors. Some of the associated sectors indicate “Margined.” In I/O models, expenditures are expressed in terms of producer prices, which is the value of goods at the point of production rather than at the retail level. Consequently, for goods that are not produced at the time of service, such as gasoline, the prices paid by final consumers must be allocated to the portion going to the retailer, wholesaler, transportation, and manufacturing (Olson and Lindall, 1999). According to the production function, an average of 53% of each dollar generated by charter vessel operations is spent on inputs from other sectors. The remaining 47% is value added, which goes to employee compensation, proprietary income, taxes, and other income. The intermediate expenditures were translated into absorption coefficients, which are the percentages of each dollar of revenue spent on each input. For example, an absorption coefficient of 0.05 was calculated for insurance expenses, meaning that, on average, charter businesses spend 5 cents of each dollar of revenue on inputs from the insurance sector. In this same way, absorption coefficients were calculated for each input sector. Table 13. Estimated 2006 Average WA and OR Charter Industry Production Function and Associated IMPLAN Sectors Outlay Categories Vessel Related Proprietary Income Captain's Payments Other Crew Payments Office Labor and Other Labor Engine Overhaul All Other Vessel Maintenance Electronics Maintenance Haulout Moorage Purchase of New Gear Vessel Insurance Vessel Professional Services Vessel Advertising Fuel Fishing Supplies Bait Expenses Food and Drink Taxes and Government Fees Domestic Taxes and Government Fees Foreign Commissions for Booking Agents Telephone and Other Communications Allocation (%) IMPLAN Sector 27.2 8.6 3.2 1.1 3.7 3.8 0.8 1.4 2.0 1.5 5.0 0.6 2.1 10.8 3.0 1.2 0.1 6.6 0.0 5.7 1.1 Proprietary Income Employee Compensation Employee Compensation Employee Compensation Ship building and repairing Ship building and repairing Electronic equipment repair and maintenance Ship building and repairing Other amusement and recreation Sporting goods, hobby, book stores (Margined) Insurance carriers Other miscellaneous prof. and tech. services Advertising and related services Petroleum refineries (Margined) Sporting goods and athletic goods mfg. (Margined) Animal prod., except cattle, poultry (Margined) PCE vector 1111 Indirect Business Taxes Indirect Business Taxes Travel arrangement and reservation services Telecommunications 19 Other Vessel Related Booking Operation Related Labor for Shorebased Personnel Advertising Insurance Professional Service Association Fees Telephones Other Office Expenses Lease/Loan Payments on Vehicles Legal/Financial Services Other Booking Related 8.4 Monetary authorities and depository credit 0.15 0.40 0.44 0.07 0.01 0.39 0.65 0.04 0.01 0.01 Employee Compensation Advertising and related services Insurance carriers All other miscellaneous prof. and tech. Civic, social, professional organizations Telecommunications All other miscellaneous mfg. (Margined) Monetary authorities and depository credit All other miscellaneous prof. and tech. All other miscellaneous mfg. (Margined) The CA charter sector was created using the results of a survey conducted by Pacific States Marine Fisheries Commission (PSMFC) and Southwest Fisheries Science Center. The survey collected cost and earnings information for the year 2000 from the West coast charter and head boat fleet (PMFC, 2004). The population targeted by the survey consisted of vessels operating out of California, Oregon and Washington that provided ocean recreational fishing trips on a commercial basis during 1997-1998. Approximately 12% of the charter and head boats licensed to operate in California, Oregon and Washington were sampled using a stratified random sampling approach. Each stratum consisted of a particular combination of region and size class. Vessels were categorized according to the region of their home port: southern California (for homeports from the Mexican border to Point Conception), northern California (for homeports north of Point Conception to the Oregon border), Oregon, and Washington. Vessel size class was defined in terms of vessel length: "small" for lengths of 15-30 feet, "medium" for lengths of 31-49 feet, and "large" for lengths greater than 49 feet. To develop a single production function for charter vessel businesses in CA, a weighted average of the survey results was used. The cost and earnings data collected in the survey was weighted by category for Northern CA Large, Northern CA Medium, Northern CA Small, Southern CA Large etc. based on the relative frequency of the cohort in the total population. The weighted average cost function for CA charter businesses along with the assigned IMPLAN categories appears in Table 14. 20 Table 14. Estimated 2000 Average California Charter Industry Production Function and Associated IMPLAN Sectors Outlay Categories Proprietary Income Captain and crew Labor for Shorebased Personnel Engine Overhaul All Other Vessel Maintenance Electronics Maintenance Haulout Moorage Purchase of Gear or Equipment Insurance Professional Services Advertising Fuel Supplies Bait Food and Drink Fees Paid to Domestic Governments Fees Paid to Foreign Governments Commissions Paid for Booking Trips Telephones Other Other Office Expenses Landing Taxes Mortgage for Vessel Association Fees Lease or Loan of Motor Vehicles Allocation (%) 45.21 12.19 1.25 1.21 3.57 0.22 1.09 1.89 3.50 1.16 0.37 1.31 7.20 2.27 5.18 2.59 1.72 2.00 5.02 0.60 0.15 0.32 0.41 4.32 0.23 0.25 IMPLAN Sector Proprietary Income Employee Compensation Employee Compensation Ship building and repairing Ship building and repairing Electronic equipment repair and maintenance Ship building and repairing Other amusement and recreation Sporting goods and athletic goods mfg. (Margined) Insurance carriers Other miscellaneous prof. and tech. services Advertising and related services Petroleum refineries (Margined) Sporting goods and athletic goods mfg. (Margined) Animal prod., except cattle, poultry (Margined) PCE vector 1111 Indirect Business Taxes Indirect Business Taxes Travel arrangement and reservation services Telecommunications All other miscellaneous mfg. (Margined) All other miscellaneous mfg. (Margined) Indirect Business Taxes Monetary authorities and depository credit Civic, social, professional organizations Monetary authorities and depository credit Total industry output for charter vessels in CA were estimated using weighted revenues from the survey. Average revenue in each stratum was weighted in the same manner as costs. The weighted average revenue estimate was then multiplied by the total number of charter vessels in CA in 2000 to estimate total industry revenue. The year 2000 estimate of industry output was then adjusted to 2008 by using effort changes of for-hire fishing trips in CA from 2000 to 2008 from Fisheries Economics of the United States 2009 (U.S. Dept. Commerce., 2011). Employment by charter vessels in CA was estimated by dividing total industry output in 2008 by the weighted average output per employee collected in the survey. The weighted average output per employee was estimated through the same stratum weighting method discussed above. 21 5.6. Product Flow The product flow of fishery resources is complex and there are few sources of data that can be used to accurately account for these transactions in an economic model. Product flow refers to the flow of fish from harvesters to processors, wholesale seafood dealers, restaurants, households, and other sources of demand for fish. Like other fishery IO models (Kirkley et al. 2004, Steinback and Thunberg 2006), IO-PAC relies on simplifying assumptions. The assumptions about the flow of fish in IO-PAC are changed in the revision. For the state and West Coast level study areas, the revisions involve different product flow assumptions for groundfish trawl fish from other gear/species combinations. For port level models, groundfish trawl fish is treated the same as all other fish, and a new approach of using IMPLAN to develop product flow assumptions is used. The collections data by the Washington Department of Revenue (WDOR) Enhanced Food Fish Tax is no longer used. For fish harvested with groundfish individual fishing quota (IFQ), the assumptions about product flow are driven by data collected through the EDC program. Under trawl rationalization, all IFQ fish sold by harvesters must be received by an entity with a First Receivers License. Those with Licenses are required to complete an EDC survey, so there is no harvested fish that is bypassing these first receivers. As described above, these first receivers are treated as processors. Hence, for the West Coast as whole and the state level study areas, all groundfish trawl quota fish flows to “processors” as defined here. None goes directly to other businesses and households that demand fish without going through the processing channel. Due to cross hauling, it is possible that fish landed in a port, will not be processed therein. At this time we are unable to quantify this cross-hauling activity for either IFQ or non-IFQ fish. Consequently, we handle both in the same manner. Because we currently cannot quantify the cross-hauling activity, IMPLAN data about processor demand for fish within a study area (port group) are utilized. The IMPLAN commodity balance sheets were used in the last version of IOPAC for this same purpose. The revision uses the trade flow information in IMPLAN differently because the previous approach underestimates the amount of fish that flows from harvesters to processors. In the last version of IO-PAC, it was assumed that processor demand for fish from harvesters followed the econometrically derived regional purchase coefficient (RPC) in IMPLAN. The primary issue with this approach is that processor demand for fish from harvesters is equivalent to all other sources of fish demand (households, restaurants, grocery stores, hospitals, etc.). All agents of demand are treated the same. They all source the same proportion of their demand for fish from harvesters within the study area. This issue is exemplified by examining the demand for harvested fish in Oregon. Figure 1 was generated by constructing a default IMPLAN model for each study area, then viewing the Industry/Institution RPC tab under the Edit Trade Flows function in IMPLAN. Figure 1 indicates that Gross Commodity Demand for fish among processors in the state of Oregon is $154,402,400. Essentially, this indicates that in order to support their level of production in Oregon, processors needed $154 million in raw fish. The Local Commodity Demand column indicates that $20 million of this demand for raw fish was sourced from harvesters in Oregon. The reason 12.9% of demand was fulfilled by harvesters in Oregon, is that the RPC of 0.129738 applies to all sources of demand, which are shown in the 22 figure as Other animal food manufacturing, Frozen food manufacturing, Poultry processing, and all the household income groups. Given the nature of the fish harvester and processor relationship on the West Coast, we contend that it is more appropriate to assume that harvesters will satiate demand for fish among processors before they sell fish to any other type of buyer. Due to Trawl Rationalization, this is certainly the case with groundfish, where fish landed with trawl quota must be sold to a licensed First Receiver and we contend that this approach is more accurate even for non-trawl quota species as well. Hence, for all port group study areas, IO-PAC assumes that landings from the fish harvesting sectors flow to seafood processors in the same proportion as the ratio of default IMPLAN processor demand (sector 61) to the available fish harvesting sector (17) supply. This proportion can be determined using Figure 1. The Gross Commodity Demand of seafood processors in Oregon is $154 million. The Total Commodity Supply in the figure of $241.7 million represents the total fish landings in Oregon. Utilizing this assumption, the amount that flows to processors is (154.40/241.72) ≈ 0.639. Since this is a state level model, the 63.9% would apply to of all non-IFQ fish. For IFQ fish at the port level, the same approach is used. Figure 1. IMPLAN trade flow of fish in Oregon (2010) 23 6. Model Construction The revisions to IO-PAC construction are done to reduce effort involved in making changes to fishing sector production functions over time and simplify the process of building numerous port level models. The original version of IO-PAC modified IMPLAN Version 2 software. IMPLAN Version 3 software is used for in the IO-PAC revision. Version 3 provides a new method for importing changes in expenditures made by fishing vessels and recreational anglers. Expenditure changes can now be imported into IMPLAN using EXCEL templates provided by IMPLAN. Model construction in IO-PAC is constructed through the use of several of these EXCEL templates. With the change, the modeling is done primarily using spreadsheets rather than with modifications to the IMPLAN database. The change permits easy modification of production functions used in the model, and also changes in study areas can be accomplished easily. The ease in changing production functions is important because the survey data from which they are built are continually being updated. The ease in changing study areas is important because study areas of interest often deviate from those used in groundfish management. For example, the new approach permits an easy shift to study areas of interest in salmon management. The following discussion borrows content from the Version 3.0 User’s Guide (MIG, 2010). In IMPLAN Version 3, contributions and impacts are estimated by setting up activities of different types. Activities are groupings of one or more Events that represent spending changes within a study area. Activities come in six different types: industry change, commodity change, labor income change, household spending change, industry spending pattern, and institutional spending pattern. Each activity type is appropriate for different types of analysis. By enabling spending changes of six different types, IMPLAN Version 3 is more flexible than Version 2, but skill by the analyst is more critical in determining which type of activity is most appropriate for a particular estimate. The activity types used in IO-PAC are briefly described below. 6.1. IMPLAN Activity Types Industry Change is used to estimate the economic impact or contribution of a particular industry, where industry refers to a group of establishments that engage in similar types of economic activity. The most widespread industry classification scheme is the North American Industrial Classification System (NAICS). IMPLAN has its own industry classification scheme where each group consists of one or more NAICS categories. An example of an industry change is to estimate the effect of a $1 million change in demand among “wood window and door” manufacturers in a particular study area. Commodity Change is used to estimate the economic impact or contribution of a particular good or service. Commodities may be produced by one or more industries and institutions, where institutions are households and governments. All industries in IMPLAN have a primary commodity of the same name as the industry. Thus, the primary commodity of wood window and door manufacturers is the commodity “Wood windows and doors”. However, wood window and door manufacturers also produce the commodity “Wood kitchen cabinets and 24 countertops.” An impact or contribution estimate due to a demand change for a particular commodity will affect all industries that produce the commodity. For example, shocking the commodity “wood windows and doors” will affect wood window and door manufacturers, but it will also affect the industry “sawmills and wood preservation.” It is important to note that multipliers used to develop estimates are produced for each endogenous industry or institution in IMPLAN. The effective multiplier for a commodity-based estimate is a weighted combination of the multipliers of the affected industries and institutions. The weighting among industries for a particular commodity is the respective market share for the commodity. The government institutional sectors (State and Local Government, Federal Govt. Non-Defense, etc.) are often treated as exogenous. As a result, their institutional contribution to production is treated as a leakage in impact/contribution estimates. This is a principle difference between industry-based versus commodity-based estimates. Labor Income Change is used to estimate how changes in employee compensation or proprietor income will affect the economy. This would be the appropriate approach if one wanted to estimate the impact of increased payments to employees in a study area. Industry Spending Patterns are particularly useful in modeling the fishing industry with primary cost earnings data collected from participants. The following was taken from Version 3.0 User’s Guide (MIG, 2010). “Industry Spending Patterns allow you to import an Industry’s production function, or build an Industry from data about its expenditures. This Activity type works with coefficients of total budget spending, allowing you to use Level to create a series of estimates about the impacts of different expenditures to a single Industry. One thing to remember when using Industry Spending patterns is that their coefficients typically do not include their labor income spending, and therefore the coefficients sum to less than 1.00. To ensure that the full impact of spending in an Industry is captured, you will need to create a Labor Income impact to compliment your Industry Spending pattern.” Institution Spending Patterns are useful in modeling the change in households or government spending. In IO-PAC, we use the State and Local Government Non-Education spending pattern to model the effect of taxes paid by fishing industry participants. This marks a departure from the last version of IO-PAC in which taxes were shifted to the value-added account “Indirect business taxes.” Because of changes in the IMPLAN software, this approach is no longer possible. 6.1. Importing Fishery-Specific Information All of the above activity types can be created in EXCEL and imported into the IMPLAN software. For the industry additions in IO-PAC, the procedure involves mapping the production function information in Tables 7, 8, 13 and 14 into IMPLAN commodities using the bridge information displayed in Appendix A. Recreational effort is mapped into IMPLAN commodities and industries as shown in Table 12. 25 Figure 2 displays an example of an Industry Spending Pattern activity EXCEL template that is imported into IMPLAN. After the activity is imported into IMPLAN the “Local Direct Purchase” that is set to 100% on the import must be set to the “SAM Model Value” using the IMPLAN interface. All of these SAM model values will be unique to the study area in question. The Large Groundfish Trawler activity is now ready to estimate the indirect and induced effects of goods and services purchased by the Large Groundfish Trawl vessels. The effects of payments to captain, crew, and proprietors using the analysis by parts approach. 26 Figure 2. Large Groundfish Trawler industry spending pattern example Activity Type Industry Spending Pattern Sector 3001 3002 3003 3004 3005 3006 3010 3013 3015 3017 3027 3041 3042 3043 3044 3045 3046 3047 3048 3050 3051 3052 3053 3054 3055 3056 3057 3058 3059 3060 3062 3063 3064 3065 3066 3067 3068 3069 3070 3083 3085 3105 Activity Name Large Groundfish Trawler Actiity Level 1 Event Value 0.00000093 0.00000553 0.00033032 0.00020865 0.00001093 0.00000951 0.00000296 0.00009052 0.00000200 0.00775418 0.00000015 0.00024154 0.00003284 0.00005496 0.00003994 0.00000112 0.00006533 0.00023512 0.00007519 0.00005003 0.00022556 0.00019185 0.00051625 0.00074862 0.00061542 0.00021462 0.00012303 0.00007312 0.00164051 0.00040442 0.00075784 0.00042171 0.00003310 0.00032730 0.00018928 0.00007958 0.00022747 0.00027572 0.00976184 0.00024055 0.00021683 0.00112477 27 Local Direct Purchase 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Figure 2. Large Groundfish Trawler industry spending pattern example (Continued) Activity Type Industry Spending Pattern Sector 3107 3109 3115 3138 3141 3142 3149 3150 3216 3225 3227 3256 3259 3266 3271 3283 3290 3319 3321 3323 3324 3326 3329 3330 3332 3333 3334 3335 3337 3339 3340 3354 3357 3393 3394 3410 3416 3425 3436 Activity Name Large Groundfish Trawler Event Value 0.00508185 0.00066741 0.06619659 0.00245623 0.00000244 0.00152794 0.00023378 0.00018634 0.00020329 0.00210726 0.00012873 0.00021006 0.00034217 0.00014568 0.00028796 0.00133483 0.14267499 0.06811651 0.00000141 0.00005121 0.01079769 0.03849354 0.00048528 0.00118954 0.00000710 0.00120790 0.00002567 0.00028480 0.00083260 0.00002267 0.00001297 0.01136448 0.04634027 0.00087277 0.00145541 0.00677249 0.00414619 0.00867350 0.00009212 28 Actiity Level 1 Local Direct Purchase 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Activity Year 2010 6.1. Analysis by Parts In typical IO analysis, a shock to aggregate demand is placed on one of the industry sectors or commodities that are included in the model. Total economic impacts or contributions are then estimated as the backward linked effect of a demand change on the target industry or commodity. To calculate the estimate, the direct effect of the demand change is multiplied with the respective industry multipliers. As explained by Manshel (2012) “Analysis-by-parts (ABP) does not start with an impact on a target industry sector or commodity. Instead, we will specify the goods and services the target industry purchases in order to satisfy a demand or production level. The purchase of these goods and services from local sources actually represent the first round of indirect purchases by the target industry. In addition to the goods and services (first part) we need to analyze the impact of the payroll (second part) of our target industry necessary to meet the new demand or production level.” In ABP the indirect and induced effects of goods and services purchased by a fishing vessel sector is the “first part” of calculating the economic impact of a given level fishery harvest. The “second part” is payments to captain, crew, and proprietors. The impact of payments to captain, crew, and owners for a given level of harvest is estimated separately using the Labor Income Activity described above. The sum of these two impacts is the total indirect and induced effects of a given level of fishery harvest. To these indirect and induced effects the direct effects must be added to reach the total effects of a given level of harvest. An example of the approach is shown below. In IO-PAC, there are a few additional wrinkles in the ABP approach. First, on the commercial side because we are modeling the effect to both processors and harvesters, the ABP must be done for both. Additionally, the treatment tax revenue paid by harvesters is one additional “part” needed to estimate each impact for state and West Coast level study areas. Taxes are part of the production function of the commercial fishing harvesters. These taxes paid are not part of their industry spending patterns. For state and West Coast study areas, these taxes are assumed to be endogenous. The implication is that government spending will be affected by changes in tax payments from fishery participants. These payments are assumed to be subsequently spent by state and local governments. State and local government spending is expected to follow the State and Local Government Non-Education institutional spending pattern that is contained in IMPLAN. 7. Impact Estimation IO-PAC can be used to assess the impact of a given fishery management action when an externally derived, exogenous assessment of how the action will affect the gross output of industries or commodities that are included in the model is available. With an exogenous estimate of the effect of a management action on fish harvest, IO-PAC will estimate the backward-linked impacts of the action on the economy. On the commercial side, economic impacts can be made on a commodity or industry basis. 29 IO models are designed to estimate the backward linked effects of a change in demand on a given industry or change in demand for a given commodity. For commercial vessel landings, IO-PAC utilizes a technique outlined by Steinback (2004) to use IO models for a change in production rather than a change in demand. If we were using the IO model in the standard way to estimate the backward linked impact of a shock to processed seafood demand, we would run a single direct commodity effect on processed seafood. The backward linked effect of that change in processed seafood demand would hit every firm involved in the production and distribution of seafood. A margin would hit the retailers, wholesalers, and processors. Harvesters would be hit as an indirect effect, because they supply the processors with a production input. The processor multiplier would have an embedded indirect effect of a change in harvester landings. The approach outlined by Steinback (2004) involves exogenously shocking the relevant seafood sectors (harvesters and processors) and setting their regional purchase coefficients (RPCs) to 0 to avoid double counting and feedback effects. By following this approach we are tricking the IO model to give us the economic impact of a change in "demand" for seafood at the processor and harvester stages of production separately. Because the RPC on harvesters is set to 0, there is no indirect effect on harvesters from a change in processor production. Because the indirect effect on harvesters of a shock to processors is absent, the two effects can be summed without double counting. With a given change in commercially harvested fish, how are the economic impacts estimated? One must decide whether a shock is more appropriately targeted on a commodity or industry sector included in the model. The appropriateness of commodity versus industry shocks depends on the research question.6 Assuming the appropriate target is the Large Groundfish Trawlers (LGT) industry sector, the impacts are estimated as follows. First, the LGT revenue is run through their production function. The LGT production function is in the form of an industry spending pattern imported into IMPLAN. The function can be seen using the “Setup Activities” screen in IMPLAN (Figure 3). The activity is named “Large Groundfish Trawler.” Choosing the activity will cause the production function information specific to LGTs to show up in the events window. The “Sum of Event Values” at the bottom of Figure 3 shows the total share of LGT output that is used for factors of production excluding labor, so 45% of LGT revenue is used for inputs such as fuel, insurance, etc. The exogenous change in LGT harvest is entered in the “Level” cell. In this example, $1 million in revenue is entered. 6 See Leonard and Watson (2011) for a more detailed discussion of commodity versus industry impacts. 30 Figure 3. Large Groundfish Trawler industry spending pattern activity Second, employee compensation and proprietary income is shocked with the same $1 million. The labor effect is contained in the activity “LGT Labor.” It is imported as a Labor Income Change. The labor income in the event is set to the proportion of total industry output (TIO) among LGTs that is paid to employees (captain and crew) and proprietors (vessel owners). Figure 4 indicates that among LGTs the shares paid to employees and proprietor are 0.39 and 0.11 respectively. Importing labor income as a share of TIO, allows the “Level” to be shocked with the same exogenous revenue run through the LGT spending pattern. In this example, we shocked LGT revenue by $1 million. 31 Figure 4. Large Groundfish Trawler labor income Third, since the study area for this model is the whole West Coast, we import the institution spending pattern for State and Local Government Non-Education (SLG). The share of industry output paid in taxes is treated as endogenous in the state level and West Coast study areas. The base institution spending pattern for SLG is put in EXCEL and coefficients for each of the commodity purchases’ are scaled so that the sum of commodity purchases equals the share of TIO paid in taxes among LGTs. This enables the “Level” to be shocked with the same exogenous revenue run through the LGT spending pattern. In this example, we shocked LGT revenue by $1 million. 32 Figure 5. Large Groundfish Trawler state and local govt. non-education To complete the intermediate and induced effect of a $1 million change in LGT revenue the Large Groundfish Trawler spending pattern, LGT labor income, and LGT S/L NonEducation are all combined in a single analysis scenario dubbed “LGT” in Figure 6. 33 Figure 6. Large Groundfish Trawler impact scenario The analysis by parts results indicate the total indirect and induced effects of a $1 million change in LGT revenue. The impact results for the West Coast study are for an increase in output of $1.37 million and an employment change of 9.5 jobs. This is the total indirect and induced effect of a $1.0 million change in LGT harvest. To this amount, the direct effects on harvesters must be added (Steinback et. al, 2008). The direct output and employment of LGTs are $1.0 million and 8.4, respectively. Altogether, the direct, indirect, and induced effect on output is $2.37 million and on employment is 17.9 jobs. After estimating sales by seafood processors, the analysis by parts approach must be conducted in the same manner as for harvesters. Estimated sales changes for seafood processors are made by using product flow in IMPLAN for the default seafood processing sector (71) and markup margin information obtained through the EDC program. For all port level study areas, it is assumed that landings from the fish harvesting sectors flows to seafood processors in the same proportion as the default IMPLAN intermediate processor demand (sector 61) to fish harvesting supply (17) ratio. This value is determined by constructing a default IMPLAN model for the study area of interest, then examining the commodity balance sheet for the harvested fish (commodity 3017). For the West Coast example here, it is assumed that 100% is processed. Fish landings that are purchased by the processing sector in each study area are converted into revenue changes by applying the margins derived from the EDC data (Table 10). These producer values are then entered as the change in direct sales for the seafood processing sector. For each study area, ΔLk represents the change in total fish landings among vessel classification k, p represents the ratio of processor demand (sector 61) of the commodity fish to the available fish harvesting supply (sector 17), and mj represents the markup for species j, then the change in sales for seafood processors (ΔPS) is given by (11) PS Lk ( p)(m j ) k j 34 In our example of a $1.0 million change for LGT, assume that the landings are comprised only of sablefish. For the West Coast it is assumed that 100% of the sablefish is processed. Table 10 indicates that the markup for sablefish is 1.61, so for a $1.0 million increase in sablefish delivered to processors, processor revenue is $1.61 million. The analysis by parts approach is used to estimate the impact of the $1.61 million in the same manner as for harvesters. The total output and employment change resulting from a $1.61 million change in processor revenue are $2.6 million and 18.53, respectively. The results from the analysis by parts results for both LGTs and processors are combined to reach the total change resulting from $1.0 million change on LGT sablefish landings. Because LGTs and processor effects are separated as a result of our breaking the link between processors and harvesters, the results of each can be added together without double counting. The sum of both the LGT and processor effects is $4.95 million in economic output and 36 jobs. On the recreational side, recreational spending vectors for private and charter vessel effort are created in EXCEL and imported into IMPLAN as commodity and industry change vectors. The commodity change and industry change vectors are scaled so that the sum of all affected commodities and industries equals one. Because the vectors are scaled, a change in recreational spending is entered using the “Level” under “Set Up Activities” in IMPLAN A snapshot of private boat recreational commodity purchases is shown Figure 7. A hypothetical expenditure change of $1.0 million is entered in the “Level.” Notice that the sum of event values near the bottom of the figure is 0.75. This indicates that 75% of every dollar in expenditure entered in the “Level” will be distributed to the commodity categories. The other 25% is accounted for in the industry changes for private boat recreational fishing. 25% of each dollar in the “Level” will be distributed to one of the industry categories. The total effect of the $1.0 million change is done by creating an “Activity Scenario” that includes both the commodity changes and industry changes. In this $1.0 million example, the total economic output estimate is $1.88 million and 14.5 jobs. 35 Figure 7. Private Recreation Commodity Purchases 36 8. Discussion The revision of IO-PAC is intended to make use of the latest commercial fishery cost earnings data collected by the Northwest Fisheries Science Center, incorporate more recent IMPLAN data, add a recreational component that can be used for contribution and impact estimates resulting from recreational fishing trips, add separate mothership and catcher-processor sectors, and migrate IO-PAC to IMPLAN version 3. Since the first version of IO-PAC was completed (Leonard and Watson, 2010), the voluntary cost earning surveys used to develop the production functions for the commercial fishing sectors in the model have been reprised. The IO-PAC revision incorporates these latest survey results. Because of the expanded scope and increased detail of the more recent surveys, incorporating the more recent data has the added benefit of likely increasing the accuracy of IOPAC, especially for vessel classifications that were previously not covered or partially covered. The revision to IO-PAC increases the baseline IMPLAN data from 2006 to 2010. The IMPLAN data are based on economic relationships in 2010 as opposed to 2006 before the revision. Impacts of management actions in succeeding years are determined by converting the estimated changes in gross revenues to year 2010 dollars before the impacts are estimated. IMPLAN then converts the impact estimates back to the year of the input data (through 2030). This process accounts for the effects of inflation on the impact estimates. The economy wide data that is contained in IMPLAN is slow to change. Technical change and demand remain in the economy as a whole remain relatively stable. As a result, the 2010 IMPLAN data will be suitable for use in IO-PAC for several years to come7. The inclusion of a recreational component permits the revised version of IO-PAC to be used for recreational fishing contribution and impact estimates. The inclusion of the recreational component was enabled through the use of recreational expenditure data for 2006 (Gentner and Steinback, 2008) and charter vessel cost earnings data collected by the PSMFC (2004) and the NWFSC in 2006. The revision also includes shoreside processor data collected through the EDC program and changes the method of assessing the proportion of harvested fish that is passed to processors. The inclusion of the EDC data likely reduces the error in estimating processor impacts. Prior to the EDC, estimates where made using non-species specific production function margins (markup) for seafood processors. A limitation to the prior approach is that a dollar of any species will generate the same revenue to processors. While less obvious, the prior approach was also prone to error because the default production functions contained in IMPLAN are based on Economic 7 Opinions differ as to how frequently the input output data should be update. Based on the CIE review of IO-PAC completed in October 2009, the opinion of reviewers was every 3-5 years. The Benchmark Input-Output Table constructed by Bureau of Economic Analysis is updated every five years. 37 Census data for processors in the entire United States. If seafood production practices on the West Coast differ from those of the United States as a whole, this approach is prone to error. The current revision includes a substantial change in model construction that migrates IO-PAC to IMPLAN version 3 software. This migration reduces the effort in making production function changes when newer cost earnings data are available and in creating models for different study areas. The real advantage of the new approach is that once the production functions for the different fishery sectors are completed in a model for one study area, such as the West Coast, they can be imported into an alternative study area with click of a button. Models for all 22 study areas included in the model can be completed in a couple of days rather than weeks. Additionally, the new approach permits customised study areas to be completed with minimal effort. There are several areas where the revised IO-PAC can potentially be further improved. First, IO-PAC relies on a weighted average production function for the shoreside commercial vessels on the West Coast that are not currently covered by NWFSC cost earnings surveys. Second, for the at-sea fleet, which includes motherships and catcher-processors, IO-PAC does not currently include a production function due to their historical exclusion from the NWFSC’s voluntary cost earnings surveys. On the recreational side, IO-PAC’s expenditure estimates are not port specific and were made based on expenditures that occurred in 2006. For port level impacts, estimates from IOPAC may understate or overstate the effects of changes in recreational fishing effort if port area expenditures of recreational anglers differ from state level estimates. Additionally, recreational expenditures may have changed since 2006, both in the level of spending per trip and the basket of goods and services purchased. To the extent that mean recreational trip expenditures have changed since 2006, there is potential for error in the estimates. Lastly, the charter vessel sector created for CA is based on cost earnings data from 2000 while WA and OR are based on cost earnings data from 2006. Although this represents the most recent data available, there is the potential for error if the cost and earnings of vessels operating as charter vessels has changed since the data were collected. There are several improvements planned for IO-PAC to address these issues. Many of the planned improvements to IO-PAC will be enabled through the use of data collected in the mandatory EDC program.8 It is expected that data collected through the EDC will lead to improvements in the vessel production functions in IO-PAC. Unlike the voluntary cost earnings surveys, nearly all of the vessels that participate in the West Coast groundfish fishery are expected to complete an EDC survey. This will lead to improvements in the specification of production functions currently covered by the voluntary cost earnings surveys, and increased coverage to sectors not previously covered by the voluntary efforts such as motherships and catcher-processors. Additionally, the EDC will provide the data necessary to construct unique production functions for mothership and catcher-processor sectors. 8 The regulations detailing the Economic Data Collection program (50 CFR 660.114) are available online at: http://www.nwfsc.noaa.gov/research/divisions/fram/economic_data.cfm. 38 Additional planned improvements include updated recreational expenditure estimates and updated charter cost earnings data. The 2011 National Marine Recreational Fishing Expenditure Survey9 is currently being compiled. The data is expected to be available in the next couple of months. On the charter recreational front, in 2013 cost earnings surveys of California vessels will be completed by the Southwest Fisheries Science Center and the NWFWSC will complete a survey of those in WA and OR. 9 See additional information online at http://www.st.nmfs.noaa.gov/st5/documents/Nationwide_brochure.pdf 39 References CFR (Code of Federal Regulations). 2010. 50 CFR § 660.114. Trawl fishery—economic data collection program. Online at http://ecfr.gpoaccess.gov/cgi/t/text/textidx?c=ecfr&sid=6e3adf5fe27 94843765901aa0c829f4c&rgn=div8&view=text&node=50:11.0.1.1.1.4.1.5&idno=50 [accessed 29 December 2011]. Gentner, Brad, and Scott Steinback. 2008. The Economic Contribution of Marine Angler Expenditures in the United States, 2006. U.S. Dep. Commerce, NOAA Tech. Memo. NMFSF/ SPO-94, 301 p. Leonard, J., and P. Watson. 2011. Description of the input-output model for Pacific Coast fisheries. U.S. Dept. Commer., NOAA Tech. Memo. NMFS-NWFSC-111, 64 p. MIG. 2010. Version 3.0 User’s Guide. 502 2nd St., Ste 301, PO Box 837, Hudson, WI 54016. PSMFC (Pacific States Marine Fisheries Commission). 2004. West Coast Charter Boat Survey Summary Report, 2000. 205 SE Spokane St., Suite 100, Portland, OR 97202. Radtke, H. D., and S. W. Davis. 2000. Description of the U.S. West Coast commercial fishing fleet and seafood processors. Report prepared for Pacific States Marine Fisheries Commission, Portland, OR. Steinback, S. R. 2004. Using ready-made regional input-output models to estimate backward-linkage effects of exogenous output shocks. The Rev. Reg. Stud. 34(1):57–71. Steinback, S. R., and E. M. Thunberg. 2006. Northeast regional commercial fishing input-output model. U.S. Dept. Commer., NOAA Tech. Memo. NMFS-NEFSC-188. U.S. Dept. Commerce. 2011. Fisheries Economics of the United States, 2009. NOAA Tech. Memo. NMFS-NWFSC-118, 172 p. Watson, P., J. Wilson, D. Thilmany, and S. Winter. 2007. Determining economic contributions and impacts: What is the difference and why do we care? J. Reg. Anal. Policy 37(2):140–146. 40 Appendix A: Bridge between Expenditures and IMPLAN Sectors Factor expenditures by harvesters and seafood wholesalers were allocated to IMPLAN sectors. The following lists represent the bridge between harvester and seafood wholesaler expenditures and IMPLAN sectors. The main difference between these allocations and those presented in Leonard and Watson (2011) is the movement to a new industry classification system in IMPLAN. Harvester Expenditures Fuel and lubricant expenses were allocated based on the IMPLAN default margin table for sector 115 (petroleum refineries). Sector 3115 3319 3333 3334 3335 3337 3326 Title Refined petroleum products Wholesale trade distribution services Rail transportation services Water transportation services Truck transportation services Pipeline transportation services Retail Services - Gasoline stations Total Proportion 0.393794 0.361077 0.006754 0.005192 0.008658 0.004953 0.219571 1.000000 Food and beverage expenses were allocated based on the IMPLAN personal consumption expenditure vector 1111. This vector represents the national average expenditure pattern for groceries. However, following the approach of Steinback and Thunberg (2005), purchases associated with the two default seafood sectors (i.e., commercial fishing and seafood product preparation and packaging) were reallocated to sector 60 (frozen food manufacturing), believed to better reflect likely consumption habits aboard commercial fishing vessels. Sector 3001 3002 3003 3005 3004 3006 3010 3013 Title Oilseeds Grains Vegetables and melons Tree nuts Fruit Greenhouse, nursery, and floriculture products All other crop farming products Poultry and egg products 41 Proportion 6.36E-05 0.000379 0.022642 0.000749 0.014302 0.000652 0.000203 0.006205 3015 3027 3041 3042 3043 3044 3045 3046 3047 3048 3050 3051 3052 3053 3054 3055 3056 3057 3058 3059 3060 3062 3063 3064 3065 3066 3067 3068 3069 3070 3141 3319 3332 3333 3334 3335 3339 3340 3321 3323 3324 3326 3329 3330 3436 Forest, timber, and forest nursery products Other nonmetallic minerals Dog and cat food Other animal food Flour and malt Corn sweetners, corn oils, and corn starches Soybean oil and cakes and other oilseed products Shortening and margarine and other fats and oils products Breakfast cereal products Raw and refined sugar from sugar cane Chocolate cacao products and chocolate confectioneries Chocolate confectioneries from purchased chocolate Nonchocolate confectioneries Frozen foods Canned, pickled and dried fruits and vegetables Fluid milk and butter Cheese Dry, condensed, and evaporated dairy products Ice cream and frozen desserts Processed animal (except poultry) meat and rendered byproducts Processed poultry meat products Bread and bakery products Cookies, crackers, and pasta Tortillas Snack foods including nuts, seeds and grains, and chips Coffee and tea Flavoring syrups and concentrates Seasonings and dressings All other manufactured food products Soft drinks and manufactured ice All other chemical products and preparations Wholesale trade distribution services Air transportation services Rail transportation services Water transportation services Truck transportation services Couriers and messengers services Warehousing and storage services Retail Services - Furniture and home furnishings Retail Services - Building material and garden supply Retail Services - Food and beverage Retail Services - Gasoline stations Retail Services - General merchandise Retail Services - Miscellaneous Noncomparable foreign imports 0.000137 1.00E-05 0.016556 0.002251 0.003767 0.002738 7.65E-05 0.004478 0.016116 0.005154 0.003429 0.015461 0.01315 0.035386 0.051314 0.042184 0.014711 0.008433 0.005012 0.112448 0.027721 0.051946 0.028906 0.002269 0.022435 0.012974 0.005455 0.015592 0.018899 0.06019 0.000167 0.098877 0.000487 0.002832 0.001729 0.013268 0.001554 0.000889 9.66E-05 0.001584 0.196583 0.016591 0.006296 0.00834 0.006314 Ice expenses were allocated based on the IMPLAN default margin table for sector 70 (soft drink and ice manufacturing). Sector Title Proportion 42 3070 3319 3333 3334 3335 3324 3326 Soft drinks and manufactured ice Wholesale trade distribution services Rail transportation services Water transportation services Truck transportation services Retail Services - Food and beverage Retail Services - Gasoline stations Total 0.628331 0.10275 0.000222 3.14E-05 0.006453 0.193154 0.069058 1.000000 Repair and maintenance expenses for vessel gear and equipment were allocated to sector 290, which includes ship building and repairing. Sector 3290 Title Ships Total Proportion 1.00 1.00 Moorage expenses were allocated to sector 410, which includes the activities of marinas. Marinas usually offer mooring, dockage, and haul out services for a fee. Sector 3410 Title Other amusement and recreation Total Proportion 1.00 1.00 Insurance expenses for vessels were allocated to sector 357, which includes establishments primarily engaged in underwriting and assuming the risk of insurance policies. Sector 3357 Title Insurance Total Proportion 1.00 1.00 Interest and financial services were allocated to sector 354, which includes establishments primarily engaged in financial services. Sector 3354 Title Monetary authorities and depository credit services Total Proportion 1.00 1.00 Purchases and leases of permits were allocated to IMPLAN’s value-added sector, other income. Sector Value-added Title Other Income Total Proportion 1.00 1.00 Enforcement expenses were allocated to sector 416, which includes electronic and precision equipment repair and maintenance. Sector 3416 Title Electronic and precision equipment repairs and maintenance 43 Proportion 1.00 Total 1.00 Dues were allocated to sector 425, which includes civic, social, professional, and similar organizations. Sector 3425 Title Civic, social, and professional services Total Proportion 1.00 1.00 Moorage expenses were allocated to sector 410, which includes the activities of marinas. Marinas usually offer mooring, dockage, and haul out services for a fee. Sector 3410 Title Other amusement and recreation Total Proportion 1.00 1.00 Freight supplies expenses were allocated using the default IMPLAN margin table for sector 126 (paperboard container manufacturing). Sector 3107 3319 3332 3333 3335 3330 Title Paperboard containers Wholesale trade distribution services Air transportation services Rail transportation services Truck transportation services Retail Services - Miscellaneous Total Proportion 0.581083 0.016356 0.000463 0.026539 0.130381 0.245178 1.000000 Offloading expenses were allocated to sector 410, which includes the activities of marinas. Marinas usually offer mooring, dockage, and haul out services for a fee. Sector 3410 Title Other amusement and recreation Total Proportion 1.00 1.00 Truck transportation was allocated to sector 335, truck transportation. Sector 3335 Title Truck transportation services Total Proportion 1.00 1.00 All other vessel expenditures were allocated according to proportions contained in the production function of the default commercial fishing sector in IMPLAN. This allocation scheme is identical to that developed by Steinback and Thunberg (2006) for the miscellaneous trip supplies cost category in the Northeast Region Commercial Fishing Input-Output Model. They summed the absorption coefficients associated with the manufacturing sectors that produce the commodities used in the commercial fishing production function and allocated the commodity expenditures to the appropriate manufacturing industries. Additionally, their 44 estimates include average wholesale, transportation, and retail margins across all the manufacturing sectors since the majority of these purchases occur at the retail level. Sector 3083 3085 3105 3107 3109 3138 3138 3142 3149 3150 3216 3225 3227 3256 3259 3266 3271 3283 3333 3319 3323 3324 3326 3329 3330 Title Curtains and linens All other textile products Paper from pulp Paperboard containers All other paper bag and coated and treated paper Soaps and cleaning compounds Soaps and cleaning compounds Plastics packaging materials and unlaminated films and sheets Other plastics products Tires Air conditioning, refrigeration, and warm air heating equipment Other engine equipment Air and gas compressors Watches, clocks, and other measuring and controlling devices Electric lamp bulbs and parts Power, distribution, and specialty transformers Primary batteries Motor vehicle parts Rail transportation services Wholesale trade distribution services Retail Services - Building material and garden supply Retail Services - Food and beverage Retail Services - Gasoline stations Retail Services - General merchandise Retail Services - Miscellaneous Total Proportion 0.008560 0.007716 0.040025 0.180838 0.023750 0.047259 0.040146 0.054372 0.008319 0.006631 0.007234 0.074987 0.004581 0.007475 0.012176 0.005184 0.010247 0.047500 0.001000 0.161000 0.001000 0.185000 0.013000 0.014000 0.038000 1.000000 Tax expenditures for state and West Coast models were allocated to IMPLAN’s State and Local Government Non-Education expenditure vector. Sector Institution Spending Pattern Title State and Local Government Non-Education Total Proportion 1.00 1.00 Wages and salaries of employees (captain and crew) were allocated to the value-added sector, employee compensation. Sector Value-added Title Employee compensation Total Proportion 1.00 1.00 Vessel residuals were allocated to the value-added sector, proprietary income. 45 Sector Value-added Title Proprietary income Total Proportion 1.00 1.00 Seafood Processors Seafood processor purchases were allocated as follows. Additives Commodity 3046 3059 3045 3044 3126 Title Shortening and margarine and other fats and oils products Processed animal (except poultry) meat and rendered byproducts Soybean oil and cakes and other oilseed products Corn sweeteners, corn oils, and corn starches Other basic organic chemicals Proportion 0.5860 Total Custom processing was allocated to the processed seafood commodity. Sector 3061 Title Seafood products Total Proportion 1.0000 1.00 Electrical utility expenses Sector 3031 Title Electricity, and distribution services Total Proportion 1.0000 1.00 Title Truck transportation services Rail transportation services Air transportation services Proportion 0.853 0.039 0.108 1.00 Freight expenses Sector 3335 3333 3332 Total Insurance expenses Sector 3357 Title Insurance Total 46 Proportion 1.0000 1.00 0.1989 0.1428 0.0077 0.0647 1.000000 Natural gas and propane gas expenses Sector 3032 3020 Title Natural gas, and distribution services Oil and natural gas Proportion 0.9924 0.0076 1.00 Total Offsite storage and freezing Sector 3340 Title Warehousing and storage services Total Proportion 1.000 1.00 Packaging Sector 3107 3108 3105 3146 3142 Title Paperboard containers Coated and laminated paper, packaging paper and plastics film Paper from pulp Polystyrene foam products Plastics packaging materials and unlaminated films and sheets Total Proportion 0.8034 0.1392 0.0091 0.0048 0.0435 1.000000 Total Proportion 0.2941 0.2206 0.4853 1.000000 Production supplies Sector 3327 3325 3329 Title Retail Services - Clothing and clothing accessories Retail Services - Health and personal care Retail Services - General merchandise Rental or lease of buildings, job-site trailers, and other structures Sector 3360 Title Real estate buying and selling, leasing, managing, and related services Proportion Total 1.0000 1.00 Rental or lease of processing machinery or equipment Sector 3365 Title Commercial and industrial machinery and 47 Proportion 1.0000 equipment rental and leasing services Total 1.00 Repair and maintenance on facility buildings, machinery, and equipment Sector 3039 3388 3417 Title Maintained and repaired nonresidential structures Services to buildings and dwellings Commercial and industrial machinery and equipment repairs and maintenance Total Proportion 0.363 0.364 0.273 1.00 Sewer and waste Sector 3390 Title Waste management and remediation services Total Proportion 1.0000 1.00 Shoreside monitors Sector 3375 Title Environmental and other technical consulting services Proportion Total 1.0000 1.00 Water expenses Sector 3033 Title Water, sewage treatment, and other utility services Proportion Total 1.0000 1.00 Other processors expenditures were allocated according to proportions contained in the production function of the default processing sector in IMPLAN that were not allocated to any of the cost categories already used above. Sector 3319 3014 3381 3380 3377 3369 Title Wholesale trade distribution services Animal products, except cattle, poultry and eggs Management of companies and enterprises All other miscellaneous professional, scientific, and technical services Advertising and related services Architectural, engineering, and related services 48 Proportion 0.2569 0.2188 0.1361 0.0636 0.0411 0.0402 3354 3190 3351 3366 3362 3374 3367 3368 3413 3338 3376 3356 3414 3149 3373 3425 3118 3411 3021 3202 3112 3355 3372 3416 3386 3138 3236 3375 3432 3433 3418 3352 3384 3148 3336 3363 3382 3389 3405 3247 3216 Monetary authorities and depository credit intermediation services Metal cans, boxes, and other metal containers (light gauge) Telecommunications Leasing of nonfinancial intangible assets Automotive equipment rental and leasing services Management, scientific, and technical consulting services Legal services Accounting, tax preparation, bookkeeping, and payroll services Restaurant, bar, and drinking place services Scenic and sightseeing transportation services and support activities for transportation Scientific research and development services Securities, commodity contracts, investments, and related services Automotive repair and maintenance services, except car washes Other plastics products Other computer related services, including facilities management Civic, social, and professional services Petroleum lubricating oils and greases Hotels and motel services, including casino hotels Coal Other fabricated metals All other converted paper products Nondepository credit intermediation and related services Computer systems design services Electronic and precision equipment repairs and maintenance Business support services Soaps and cleaning compounds Computer terminals and other computer peripheral equipment Environmental and other technical consulting services Products and services of State & Local Govt enterprises (except electric utilities) Used and secondhand goods Personal and household goods repairs and maintenance Data processing- hosting- ISP- web search portals Office administrative services Plastics bottles Transit and ground passenger transportation services General and consumer goods rental services except video tapes and discs Employment services Other support services Independent artists, writers, and performers Other electronic components Air conditioning, refrigeration, and warm air heating 49 0.0294 0.0189 0.0170 0.0135 0.0132 0.0125 0.0119 0.0106 0.0097 0.0084 0.0074 0.0068 0.0061 0.0047 0.0047 0.0043 0.0042 0.0041 0.0041 0.0040 0.0035 0.0034 0.0030 0.0028 0.0026 0.0025 0.0022 0.0021 0.0021 0.0019 0.0019 0.0018 0.0015 0.0014 0.0014 0.0014 0.0010 0.0009 0.0008 0.0008 0.0007 3320 3283 3387 3331 3106 3324 3415 3195 3404 3228 3323 3407 3239 3141 3403 3326 3410 3266 3330 3163 3259 3322 3321 3370 3328 3237 3238 3402 3313 equipment Retail Services - Motor vehicle and parts Motor vehicle parts Investigation and security services Retail Services - Nonstore, direct and electronic sales Paperboard from pulp Retail Services - Food and beverage Car wash services Machined products Promotional services for performing arts and sports and public figures Material handling equipment Retail Services - Building material and garden supply Fitness and recreational sports center services Other communications equipment All other chemical products and preparations Spectator sports Retail Services - Gasoline stations Other amusements and recreation Power, distribution, and specialty transformers Retail Services - Miscellaneous Other concrete products Electric lamp bulbs and parts Retail Services - Electronics and appliances Retail Services - Furniture and home furnishings Specialized design services Retail Services - Sporting goods, hobby, book and music Telephone apparatus Broadcast and wireless communications equipment Performing arts Office supplies (except paper) Total 0.0006 0.0006 0.0006 0.0005 0.0005 0.0005 0.0004 0.0004 0.0004 0.0003 0.0003 0.0003 0.0003 0.0002 0.0002 0.0002 0.0002 0.0002 0.0002 0.0002 0.0002 0.0002 0.0002 0.0001 0.0001 0.0001 0.0001 0.0000 0.0000 1.000000 Wages and salaries of employees were allocated to the value-added sector, employee compensation. Sector Value-added Title Employee compensation Total Proportion 1.00 1.00 Processor residuals were allocated to the value-added sector, proprietary income. Sector Value-added Title Proprietary income Total 50 Proportion 1.00 1.00
| File Type | application/pdf |
| File Title | Microsoft Word - IOPAC_SSC_Review_Arpil_NWC |
| Author | Jerry.Leonard |
| File Modified | 2013-03-20 |
| File Created | 2013-03-18 |