Estimating effects of exogenous output changes: an application of multi‐regional social accounting matrix (MRSAM) method to natural resource management

Abstract

Regional economists and policy-makers have lacked an appropriate methodological tool that enables them to estimate, in an unbiased way, the multi-regional economic impacts of constraints on productive capacity in natural resource-based industries. Methods developed in previous studies are subject to several, sometimes serious, methodological problems, and therefore, cannot calculate multi-regional economic impacts of supply-side shocks in an unbiased way. This study uses an adjusted demand-driven multi-regional social accounting matrix (MRSAM) method, and shows that the method can overcome the limitations of the previous studies. The method is applied to Alaska pollock fishery, as an example.JEL classification: Q2, R15

Net Economic Impacts of Recent Alaska Salmon Fishery Failures and Federal Relief

“…To overcome this weakness, some studies (e.g., Miller and Blair 2009:593-668;Tanjuakio et al 1996;Steinback 2004;Seung and Waters 2013;Seung 2014) use an "adjusted" demand-driven model to compute the economic impacts of an exogenous change in productive capacity; this model is adjusted in the sense that it is run with (1) changes in output being treated as final demand shocks and (2) regional purchase coefficients (RPCs) for all of the directly impacted industries being set equal to zero. The present study adopts this approach to calculate the impacts of the salmon fishery failures.…”