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Economic Currents

Keep up to date with the latest UHERO news.

Most of Hawaii's commercial seafood is imported, but recreational catch tips the scales back

Hawaii sits in the middle of the largest ocean on earth. So the majority of the seafood consumed on these islands must then come from local waters, right? The answer might surprise you.

The average 2000 to 2009 annual commercial consumption in Hawaii was 38.9 million pounds per year, which is roughly 28.5 pounds per capita. It goes without saying that the residents and visitors of Hawaii eat a lot of seafood, approximately 12.6 more pounds per capita than the U.S. as a whole. Only 37% of that 38.9 million pounds of commercial seafood comes from local waters. However, it is important to keep in mind that Hawaii's population also eats a wide variety of seafood, and like any other state, demands certain species that must be imported. 

There are no marine recreational fishing license requirements in Hawaii and therefore no exact recreational catch data, but DLNR and NOAA jointly conduct a survey on recreational fishers. If we add their recreational estimate to commercial sources, then that significantly changes the distribution of where our seafood comes from. Of all the seafood consumed in Hawaii, the percentage of local seafood is pushed up to 51%.

 

With the addition of recreational catch total consumption for Hawaii goes up to 50.4 million pounds, which translates to roughly 36.9 pounds per capita. This means recreational and subsistence catch add an additional 8.4 pounds of seafood consumption annually per capita for the state of Hawaii. Recreational and subsistence fishing, hunting and gathering are important components of local consumption, and should be considered as part of the solution for optimal food security.

This information is essential to assess the market competitiveness of local versus imported seafood. It is important for the formulation of public policies that are intended to promote further development of Hawaii fisheries and the aquaculture industry. You can read more about this research in the Joint Institute of Marine Atmospheric Research report, the CTAHR Extension article (Economic Issues, EI-22), and the article in Marine Fisheries Review. Future research directions include an improved estimate of continental U.S. imports and transshipments, the level of non-commercial seafood supply flow into the retail sector and import flows directly to commercial retail and food service establishments. This research was made possible with funding support from NOAA’s Hawai‘i Seafood Program (Award No. NA09NMF4520171) conducted in the College of Tropical Agriculture and Human Resources (CTAHR) at the University of Hawaiʻi at Mānoa.

- Cheryl Geslani and Kimberly Burnett


Expensive Exotics: Snakes in Hawaii

Last month a juvenile ornate tree snake (Chrysopelea ornate) was captured by military personnel near the airfield at Hickam Air Force Base. Inspectors from the Hawaii Department of Agriculture were notified and took custody of the foot-long snake. Ornate tree snakes are mildly venomous and are related to the brown tree snake (Boiga irregularis), which has devastated the ecosystem in Guam and threatens the environment and economy of Hawaii.

Snakes are not native to Hawaii and have the potential to invoke more than just fear in visitors and residents. The arrival and establishment of snakes could have hefty economic consequences to the state in terms of control costs and damages. Co-director of UHERO’s Project Environment, Dr. Kimberly Burnett, studied the potential economic outcome of a brown tree snake invasion in Hawaii as part of her Ph.D. dissertation. Depending on assumptions regarding control methods and population growth upon arrival, the snake could easily cost Hawaii $200-$300 million in management and damages including power outages, lost bird species and medical expenses related to snakebites. That's about equal to half the value of all the crops produced in Hawaii in 2011.  For more on the economic consequences of invasive species in Hawaii, visit UHERO’s Project Environment.

 

--Kimberly Burnett

Photo credit flying snake: Dr. Allen Allison, Bishop Museum

Photo credit brown tree snake: Kimberly Burnett, UHERO


UHERO 101.2: Purchasing Power of Paradise

Posted June 13, 2013 | Categories: Hawaii's Economy, Blog

One dollar in Hawaii does not go as far as one dollar in South Dakota. Regional Price Parities (RPPs) measure differences in the price levels of goods and services across states and metropolitan areas for a given year. RPPs are expressed as a percentage of the overall national price level for each year. In 2011 Hawaii had the highest RPP in the country, 16% higher than the national average. South Dakota was 13% lower than the national average.

 

 RPP's allow economists to compare incomes across regions, since the same salary will have different purchasing powers in different places. The U.S. Bureau of Economic Analysis recently released new real (inflation-adjusted) estimates of personal income for states and metropolitan areas which account for these differences. Although Hawaii's income grew faster than the national average in 2011 (3% vs. 2.7%), Hawaii's real per-capita incomes were one of the lowest in the nation, $32.5k compared to national average of $36.5k. Hawaii ranked 45th out of the 50 states and D.C. This difference is even more pronounced on the neighbor islands, where real per-capita personal income was $29.4k (with Oahu at $33.5k).

 

-Kimberly Burnett

Note: these are new, experimental RPP. Please see this link


UHERO 101.1: Unemployment Rate

How can economics help me understand the world around me? Check in every Friday for UHERO 101: explaining news that matters with basic economic concepts. UHERO cuts through the jargon and tells you what this means to you.

Star Advertiser: Isle jobless rate drops slightly to 5.1%

Hawaii's unemployment rate is often praised as being below the national average. While this is mathematically correct, there are two important caveats to keep in mind.

1. Hawaii's Prepaid Health Care Act provides benefits to employees working more than 20 hours a week. Employers may have incentive to hire 2 part-time workers to do the job of 1 full-timer to avoid this extra expense.
2. The unemployment rate captures people with zero jobs, rather than people with half a job (and from point #1, there are many of these in Hawaii).

The moral of the story is that while there may not be many people with no jobs in Hawaii, there are likely lots of people with less jobs than they need. Therefore, caution should be taken when interpreting Hawaii's low unemployment rate as a measure of economic well-being.

-Kimberly Burnett


Bringing China to the Table

Posted June 6, 2013 | Categories: Blog

Radio Australia Interview: Implications for Pacific Countries  

 

1. U.S. President Obama and China President Xi are meeting in California this weekend. What’s at the top of their agenda?

Security issues will surely be number one, with three issues dominating:

  • Cyber-security: Big U.S. concerns about cyber-attacks on U.S. government and industry computers.
  • North Korea: Its unstable behavior and how a collapse of the N. Korean state and an ensuing humanitarian crisis could be resolved.
  • Potential ways to diffuse and resolve territorial disputes with neighbors peacefully.

Economic issues will also be extensively discussed and the outcome of these discussions could well have significant implications for countries in the Pacific region.

 

2. What are the main economic issues that could affect Pacific countries?

The big issue from the Pacific perspective is whether China is invited to join the Trans-Pacific Partnership regional trade talks. The talks are focused on liberalizing trade relationships in the Pacific region and currently include the United States, Australia, New Zealand, Brunei, Chile, Peru, Canada, Malaysia, Vietnam, Mexico, Singapore, and—maybe very soon joining them—Japan.

Exclusion of China from a regional trade agreement seems unwise, when China is in the region and is now or likely to soon become the largest trading partner with each of these countries. Whether or not China would be willing to join the talks now is somewhat problematic as it may not be willing to go along with some of the main features of the TPP framework, such as stronger intellectual property rights, standardization of regulations, arbitration of disagreements between states and foreign investors, liberalization of trade in services, among others.

However, providing a mechanism for allowing China to join the TPP over the next five years would be very beneficial to the Chinese leadership, as it would provide them with some international justification for continuing to pursue market-based economic reforms at home.

 
3. OK, perhaps China would gain from entering the TPP, but would Pacific countries also gain from China’s entrance?

The answer is a clear and ringing YES. Increased trade within the TPP framework will generate gains for China AND the countries with which it trades.

But increased trade with China also comes with economic and political costs. The economic cost is that there is increased pressure on a country’s industries that compete with Chinese imports. The political cost is that increased international trade generates increased political tensions. with losers lobbying more to restrict the trade.

The trick for all Pacific countries and leaders is to minimize these costs of integrating China into the world economy. It’s a difficult task but one with potentially huge rewards.

 

---Sumner La Croix



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