Scottish Government

Technical Report: The Economic Impact of Game and Coarse Fishing in Scotland

Section 5 Economic Impact

5.0 Introduction

This report follows the same approach used in Economic Impact Appraisal of new projects and tries to assess the effect if the activity was no longer available. Initially the gross total expenditure is calculated. This was presented in Section 3.

A central element is an assessment of displacement. If a fishery ceased to exist, then theoretically all expenditure could be lost to a region. But the loss of all angler expenditure would only occur in the event that all anglers fished or otherwise diverted expenditure outside the region. This is not likely and some expenditure is not lost but simply displaced within the region to other substitute activity. In this respect, visiting anglers probably have better substitutes outside the region, whereas residents might have better substitutes within the region. We would therefore expect stronger displacement effects among local anglers. Our assessment of displacement involves assessing the percentage that will transfer to other species in the same locale (no loss); the percentage that will transfer to the same species within Scotland (no loss to Scotland); the percentage that will not fish but will continue to spend in the region/Scotland (no loss) and the percentage who will go outside Scotland to either fish or spend (total loss).

Section 2.4 described the methods used to estimate displacement and Section 5.1 below presents and discusses the net (after displacement) expenditure for each species in each region by forecasting the expenditure pattern if the activity was no longer available.

The second core element is the assessment of the multiplier effects of the net expenditure. Each species in each region has a different expenditure pattern and consequently a different multiplier effect. For example, expenditure that has a high wage element that stays within the local economy is likely to have a higher multiplier than one with a high fuel content where most of the spend is immediately transferred out in tax and material charge. There are different multipliers associated with a Local as opposed to Scottish multiplier. The latter usually being larger, because the greater the size of the region the greater is the proportion of spending retained within the region.

Combining these two factors we arrive at estimates of the Economic Impact in Section 5.2. Two estimates are given; the Economic Impact on the local economy as defined by the region and the economic impact on Scotland. These differ because of displacement within Scotland and the difference in local and Scottish multipliers. The expenditure lost for Scotland will be smaller but the multiplier larger. In our view it is important that the effect of boundary definitions is made explicit, although few studies actually do it formally.

5.1 Displacement

Displacement depend upon the nature and number of substitutes. Where the activity offered is in some way special then the loss will be greater than if the demand can be satisfied by a trip across the local boundary. Table 5.1.1 looks at the displacement rates for salmon between different groups of anglers at different locations.

Table 5.1.1 Percentage of Days Associated with each displacement response

Some responses are clearly as might be expected e.g. those from outside Scotland are most likely to leave the location and fish outside Scotland. Some responses are as expected, but much less clear. For example, salmon anglers fishing from home are only marginally more likely to fish for a different species at home than fish for salmon outside the region and in some cases simply would not fish. Some results are counter-intuitive e.g. Scottish salmon fisherman are more likely to swap species than swap locations. This suggests that other locational factors (friends, family, country cottages etc) are very significant for this group. Overall the picture that emerges is confused but with some evidence that the greatest losses are likely to come from those spending the most.

Table 5.1.2 looks at the displacement rates by species

Table 5.1.2 Displacement Rates by Species

The results here are interesting as salmon fisherman appear to be the least willing to switch regions in pursuit of salmon angling, yet most willing to give up fishing if their preferred salmon fishing were not available. On the other hand coarse anglers appear most loyal to their type of fishing.

It should be noted that the economic effect is for a species in a region and not for fishing in the region. For example, the impact of trout fishing in the Western Isles is greater than salmon fishing because more trout anglers would fish elsewhere, whereas salmon fisherman switch to brown trout fishing. To obtain some idea of the economic impact of angling as a whole on the Western Isles it would be necessary to add in the effect of those who swap species within the region.

The effects of displacement have a significant effect depending upon the assumptions made. We have estimated 5 different models; Model 1 assumes no displacement, Model 2 assumes 100% of the spend of locals is retained but all other expenditure lost and models 3a, 3b and 3c follow the displacement patterns identified above with assumption that 0%, 50% and 100% respectively of the spend of those who would not fish is lost to the region. Table 5.1.3 summarises the "expenditure lost" locally by region using these 5 models.

Table 5.1.3 Expenditure Lost to Local Region if activity ceased

In general, the more account is taken of displacement the less the impact. Model 2 has a bigger impact for Central and Orkney because of the dominance of local anglers. If we assume all their expenditure is retained in the local economy (Model 2) then the loss in impact is very significant. Table 5.1.4 shows the expenditure lost to Scotland if the activity in any of the areas ceases.

Table 5.1.4 Loss of Expenditure to Scotland as a whole if activity in any region ceases

It is important to recognise that estimates of the losses to Scotland from the collapse of activity in a region cannot be aggregated to obtain an estimate of the loss to Scotland if all activity ceased. Anglers were not asked about their actions if angling in Scotland ceased and many of those that would fish in another region would fish outside Scotland if fishing were not available here. Thus whilst the expenditure loss would not equal 113m it would also not be as low as 30m. If one assumes that transfers within Scotland would transfer outside Scotland if angling was not available, then the loss of expenditure would actually be the aggregate of the local losses, the bottom row of Table 5.1.4. Consequently we have used this to get a realistic estimate of the impact on Scotland of freshwater fishing.

5.2 Economic Impact Assessment:

5.2.0 Introduction

The approach to modelling the multiplier effect of expenditure to utilised local input-output and trade tables that enabled the tracing of the effect of each category of expenditure through the system. Section 2.5 discussed the methods used to generate the tables utilised here.

Once the models were established, for any pattern of expenditure it is possible to estimate the economic effects at each round and consequently a multiplier. There are 27 regional/specie groups, each with 3 types of angler (Home, Scottish and External) giving a total of 81 combinations. In addition there are a number of measures of "impact" and a number of multipliers. Appendix 10 produced by CogentSI provides details of the impact for each of these combinations along with the specific multipliers and job estimates. These are summarised in the following sections both without and with displacement effects as in model 3b. The results in Appendix 10 are based on patterns of expenditure based on particular estimates of angler days and angler expenditure. In some instances, the estimation of angler days was updated after the results in Appendix 10 were produced. Rather than re-running the models the results in Appendix 10 were scaled. Where there is a discrepancy between the Appendix and the main text, the latter should be used.

Sections 5.2.1 to 5.2.8, present the summary results.

The column headed Effective Spend is angler expenditure. The Direct Effect is simply the decrease in local incomes (wages and self-employment income) and any decrease in locally sourced inputs (i.e. additional local output) that arise from the angler expenditure that would be lost to the Region. Notice that some expenditures have a minimal initial local impact. For example, only about 5% of spending on petrol in, say, The Borders has a direct effect locally, 95% 'bounces off' through the purchasing of inputs from outside. In contrast, accommodation spending, after VAT has been removed, has a direct effect on the size of the hospitality industry. The composition of angler expenditure is thus important in determining the magnitude of the initial Direct Effect.

Total Local Output is the local output supported by the fishery. In producing this output, local household income has increased, principally in the form of increased wages and income from self-employment. This effect is estimated in the column headed Gross Value Added (GVA). The final column provides an estimate of the number of jobs in MBSE supported by angling measured in Full-Time Job Equivalents (FTE's)

5.2.1 Dumfries and Galloway

Table 5.2.1.1 summarise the economic impact of fishing in Dumfries and Galloway. Of 6.75m total expenditure in the region on fishing some 4.5m enters the local economy. After indirect and induced effects this gives a total output effect of 6.1m. Some 332 jobs are generated of which the vast majority are the direct result of the initial spend at the fishing locations or in the accommodation and restaurants of the region.

Table 5.2.1.1 Local Economic Impact (Type 2) D&G No Displacement

Table 5.2.1.2 Economic Impact D&G with displacement effects

The local impact is estimated to be 3.7m of output, 1.9m in income and 198 jobs