Accounting For Price Responses In Economic Evaluation Of Climate Impacts For A Fishery

The present study evaluates the economic impacts of fluctuations in anchovy (Engraulis spp.) catch in Gyeong-Nam (GN) province, South Korea, arising due to warming seawater, accounting for the effects of the responses of the anchovy price. It combines an inter-regional input-output (IRIO) model of two regions (i.e., GN province and all other provinces combined) with a simultaneous equation system (SES) of anchovy supply and demand functions estimated to make projections of the price and quantity of anchovies based on two greenhouse gas (GHG) concentration scenarios (i.e., representative concentration pathway (RCP) 4.5 and 8.5). Results indicate that estimates of the economic impacts for the two regions will be biased if we consider only the quantity (harvest) change when computing the economic impacts without accounting for the effects of the price responses. None of the previous IO-based economic impact analyses of fisheries account for the price effects induced by a quantity shock. This study fills this critical void by considering such effects.