Use of Multipliers to Predict the Effect of Growth of Aquaculture on Rural Arizona Communities - PowerPoint PPT Presentation

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Use of Multipliers to Predict the Effect of Growth of Aquaculture on Rural Arizona Communities

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Photos from AwF. Aquaculture Development ... Fish production (Kg) Breakdown of expenditures and receipts. Local (within home county) ... – PowerPoint PPT presentation

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Title: Use of Multipliers to Predict the Effect of Growth of Aquaculture on Rural Arizona Communities


1
Use of Multipliers to Predict the Effect of
Growth of Aquaculture on Rural Arizona Communities
  • 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 gt 90 of all fish
  • Production lt 0.9 million kg
  • Consumption 20.5 million kg

Net Importer Opportunity for development
5
Aquaculture Development
Out of State
In State
Local Production
Local Supply Local demand Non-basic markets
Local supply Non-local demand Basic markets
6
Aquaculture Development
Generate high capital inflow with minimum
distribution costs. --How to make the most
money? What happens to money? --multiplier
effects?
Predict the increase in economic activity for
each new dollar generated by industry sales.
7
Materials and Methods
  • 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

Out of state
In state
8
Multiplier Modeling
  • Keynesian Modeling
  • Propensity of industry to purchase inputs from
    local economy versus from the outside economy.
  • Tiebouts 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
  • Tiebouts Model
  • c marginal propensity of local consumption
    (MPC)
  • m1 propensity of aquaculture firms to
    import
  • m2 propensity non-local consumption
  • p1 propensity of the aquaculture firm to
    purchase inputs locally
  • p2 propensity of households to consume locally

10
Results Keynesian model
Non-basic
Basic market
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 m2 0.33 (Olfert and Stabler,
1994) m1 0.61 M 1.29
11
Results Keynesian model
Non-basic market
Basic
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 m2 0.33 (Olfert and Stabler,
1994) X1 0.42 M 1.50
12
Results Tiebouts model
Non-basic
Basic market
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
p1 0.39 p2 0.66 M 1.34
13
Results Tiebouts 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
p1 0.58 p2 0.66 M 1.62
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 1.29 1.5
Tiebouts 1.34 1.62
Location Quotient 66 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 AGRIC AGRIC R TRADE AGRIC SERVS CONSTR TCPUT TOTALS
feed chemicals labor fuel fingerling repairs Deprec. water
Operating 0.48 0.005 0.14 0.01 0.12 0.025 0 0.05 0.86
Investment 0 0 0 0 0 0 0.08 0 0.14
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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