Estimating Dynamic Impacts of the Seafood Industry in Alaska

This study estimates the dynamic impacts of the seafood industry and investigates multivariate relationships between basic and nonbasic sectors. The study regions are two fishery-dependent regions in Alaska, which are heavily dependent on extra-regional inputs such as non-resident labor and imports of intermediate inputs. This study follows Johansen’s approach and develops a vector autoregressive error correction model, which has the advantage of properlyattributing the impact of shocks, directly estimating long-run relationships, andidentifying the process of adjustment by nonbasic sectors to the long-run equilibrium.Results show that the impacts of the seafood industry are relatively small in the two study regions, whose economies are characterized by large leakages of labor income and large imports of inputs.