Modeling Community Economic Impacts of the Alaska Halibut IFQ Program

Abstract

In 1995 an Individual Fishing Quota (IFQ) management plan was implemented for the Alaska halibut fishery (Hippoglossus stenolepis). With annual catches in the 1990s ranging from 34 to 53 million lbs, valued between $60 million and $99 million, the Alaska halibut IFQ program represents by far the largest fishery for which the United States has adopted IFQ fishery management. How can we assess the individual and combined economic effects on Alaska fishing communities of the many different changes resulting from the IFQ program? Economists at the University of Alaska Anchorage Institute of Social and Economic Research (ISER) have developed a model for use in assessing community economic impacts of changes in fisheries harvests, markets and management. We refer to this model as the Fisheries Community Impact (FCI) model. In this paper, we use this model to look at changes between 1994 and 1995 in the economic impacts of the halibut fishery on five Alaska communities. These five communities-- Kodiak, Homer, Seward, Petersburg and Sitka--accounted for 53% of Alaska halibut landings in 1994 and 57% of total landings in 1995. For this paper, we use direct personal income earned by community residents in fish harvesting, fish processing, and supplying goods and services to the harvesting or processing industries as a measure of community economic impacts. The model may also be used to track employment impacts of fishing, as well as indirect "multiplier" effects on communities of fisheries income and expenditures. Because these effects are roughly (although not exactly) proportional to direct income impacts, for purposes of brevity and simplicity in this paper we describe only direct income impacts.