Kyle VanderLugt Kevin Fitzsimmons

Aquaculture Development Photos from AwF

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

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

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

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.

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

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

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

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

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

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

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

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)

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

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

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