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Kyle VanderLugt Kevin Fitzsimmons. Aquaculture Development Photos from AwF.

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Presentation on theme: "Kyle VanderLugt Kevin Fitzsimmons. Aquaculture Development Photos from AwF."— Presentation transcript:

1 Kyle VanderLugt Kevin Fitzsimmons

2 Aquaculture Development Photos from AwF

3 Aquaculture Development Aquaculture cages in Bay of Manila photos: Reefbase/J. Oliver

4 Aquaculture in Arizona, USA 40 aquaculture facilities (1995, ADA) 10 produce > 90% of all fish Production < 0.9 million kg Consumption = 20.5 million kg Net Importer = Opportunity for development

5 Aquaculture Development Local Production Local Demand In State Out of State Local Supply = Local demand Non-basic markets Local supply = Non-local demand Basic markets Local Demand Non-local demand

6 Aquaculture Development Generate high capital inflow with minimum distribution costs. --How to make the most money? What happens to money? --multiplier effects? Local Production Non-Basic Market Basic Markets Out of State In State Predict the increase in economic activity for each new dollar generated by industry sales.

7 Materials and Methods Local Production Non-Basic Market Basic Markets In state Out of state Survey method 10 farms Number of employees Fish production (Kg) Breakdown of expenditures and receipts Local (within home county) Within balance of state Out of state

8 Multiplier Modeling Keynesian Modeling Propensity of industry to purchase inputs from local economy versus from the outside economy. Tiebout’s Modeling Propensity of firms and households to purchase locally versus from outside economy Location Quotient % of sales outside of home locality

9 Multiplier Modeling Keynesian Model Tiebout’s Model c = marginal propensity of local consumption (MPC) m 1 = propensity of aquaculture firms to import m 2 = propensity non-local consumption p 1 = propensity of the aquaculture firm to purchase inputs locally p 2 = propensity of households to consume locally

10 Results: Keynesian model Expend in county Expend in State Expend out State Total expend Sales in county Sales in state Sales out state Total sales $845,000$407,000$910,000$2,162,000$599,000$935,000$227,000$1,761,000 39%19%42%100%34%53%13%100% c = 0.85 m 2 = 0.33 (Olfert and Stabler, 1994) m 1 = 0.61 M = 1.29 Non-basic Basic market

11 Results: Keynesian model Expend in county Expend in State Expend out State Total expend Sales in county Sales in state Sales out state Total sales $845,000$407,000$910,000$2,162,000$599,000$935,000$227,000$1,761,000 39%19%42%100%34%53%13%100% c = 0.85 m 2 = 0.33 (Olfert and Stabler, 1994) X1 = 0.42 M = 1.50 Non-basic market Basic

12 Results: Tiebout’s model Expend in county Expend in State Expend out State Total expend Sales in county Sales in state Sales out state Total sales $845,000$407,000$910,000$2,162,000$599,000$935,000$227,000$1,761,000 39%19%42%100%34%53%13%100% p 1 = 0.39 p 2 = 0.66 M = 1.34 Non-basic Basic market Non-basicBasic market

13 Results: Tiebout’s model Expend in county Expend in State Expend out State Total expend Sales in county Sales in state Sales out state Total sales $845,000$407,000$910,000$2,162,000$599,000$935,000$227,000$1,761,000 39%19%42%100%34%53%13%100% p 1 = 0.58 p 2 = 0.66 M = 1.62 Non-basic market Basic Non-basic marketBasic

14 Results: Location Quotient Expend in county Expend in State Expend out State Total expend Sales in county Sales in state Sales out state Total sales $845,000$407,000$910,000$2,162,000$599,000$935,000$227,000$1,761,000 39%19%42%100%34%53%13%100% On county base: 34% fish sold locally (66% basic) On state base: 87% sold locally (13% basic)

15 Summary Local Economy Community Local Economy State-wide Keynesian Tiebout’s Location Quotient66%13%

16 Conclusions Multipliers increase as the definition of local is increased Results consistently demonstrate aquaculture development in Arizona will have small multiplier effect. Increase economic base by increasing location quotient export more fish out of state

17 Future Work AGRIC R TRADEAGRICSERVSCONSTRTCPUTTOTALS feedchemicalslaborfuelfingerlingrepairsDeprec.water Operating Investment $1,037,760$10,810$302,680$21,620$259,440$54,050$172,960$108,100$2,162,000 Multiplier non-basic employment using matrix models by Vias and Mulligan


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