The Economic Value of Water and Ecosystem Preservation

industries. It can also predict how these affects will impact on consumers,
government, foreign suppliers, and on the economy. Input-output analysis
considers inter-industry relations in an economy, depicting how the output of one
industry goes to another industry where it serves as an input, thereby making
industries interdependent on another, both as customers of output and suppliers
of inputs. An input-output model depicts this dynamic relationship. In addition to
studying the structure of national economies, input-output analysis has been
used to study regional economies within a nation and a state.
Impacts can be divided into three categories: Direct, indirect, and induced.
The sum of impacts in these three categories generates a total impact. The direct
impact is the number of jobs gained or lost in a specific industry. Indirect impact
is the impact that is generated from the ancillary industries that support the
specific industry in question. For example, in Table 5-8 the fishing category under
Indirect shows that 3.5 jobs were created in industries that support fishing such
as boat repair and maintenance, fuel, etc. Induced impact is generated when
individuals in direct and indirect categories spend their income in sectors not
related to the primary. For example, the fisherman uses his income to take his
family to dinner and the movies, buy groceries and clothing, etc, thus multiplying
his income in the regional economy.
For each industry there are three economic impacts presented: Output,
employment, and income. Employment and income are self-explanatory. Output
refers to the value of the goods and services produced in the industry. These are
typically the largest of the three values and for the sectors under analysis here,
most output is exported from the counties.
For the purposes of this report we will use the IMPLAN modeling software for
the development of input-output matrices for three regions: Aransas/Calhoun
(combined), Aransas, and Calhoun. The input-output modeling allows us to
develop economic multipliers for each of the four sectors of concern to determine
the impact of the employment change identified in the shift-share analysis. Data
for the model is based on the year 2003, which falls in the middle of study time
period. While the decline or growth in employment will have occured over several
years, the impacts calculated are based on the total change in the time period
and the values generated are annualized.
These two techniques have been widely used by several studies, such as 1.
“NAFTA and the Lower Rio Grande Valley of Texas: Measuring impacts”, 2. “The
economic base of Chaffee County, Colorado”, and 3. “Competitive Advantage
Analysis: Results for the Northwest Region”.
The first study aimed to measure the impact NAFTA had on the displacement
of jobs (or not) from United States to Mexico, analyzing the economic trends of
the four counties that compose the Lower Rio Grande Valley – Willacy, Cameron,
Starr, and Hidalgo. Opponents of NAFTA argued that this agreement would tend
to displace jobs to Mexico and its proponents believed that the free trade
agreement would lead to more jobs at higher wages rates. Texas was a target
state for this analysis since it shares an extensive border with Mexico. This paper
56