Application of general equilibrium modeling for measuring regional economic and welfare impacts of quality changes in sport fishing in Oklahoma

Scope and method of study. The objective of the study is to develop a social accounting matrix (SAM) based computable general equilibrium (CGE) model for Oklahoma that facilitates analysis of welfare changes from expansion or reduction of sport fishing activities due to quality changes in the natural resource system. A quality tax on sport fishing is imposed to reflect the change in the natural resource system. An off-setting pollution tax is assessed to potential polluting sectors. The CGE framework is employed to obtain general equilibrium results in the region economy. The model distinguishes between market and nonmarket goods, regional domestic and imported goods, and regional domestic supply and exports. In the SAM, sport fishing trips are defined by production (function) inputs. Trip demands are defined for resident and nonresident anglers. Interdependence between sport fishing and agricultural and food processing output is evaluated by compensating (CV) welfare change. Changes in welfare are considered by household income class size.; Findings and conclusions. Sixteen scenarios were simulated with the following variations: 10 percent and 50 percent quality tax on of resident and nonresident sport fishing trips; pollution tax assessed to agriculture and food processing; and short and long run equilibriums. In the long run, a 10 percent quality tax: decreased resident and nonresident trips by 15.3 percent and 13.9, percent, respectively. Labor out-migration was 214 jobs; capital out-migration was {dollar}2,394,000; household welfare loss was {dollar}16,556,000; and GSP decreased by {dollar}14,910,000. With a 50 percent quality tax the changes were: decrease in resident and nonresident trips by 48.8 percent and 47.2 percent, respectively; labor out-migration of 810 jobs; capital out-migration of {dollar}8,927,000; household welfare loss of {dollar}64,070,000; GSP decrease of {dollar}55,670,000. Low pollution assessment tax in agriculture resulted in: labor out-migration of 570 jobs; capital out-migration of {dollar}9,727,000; household welfare loss of {dollar}11,315,000; and GSP decrease of {dollar}53,700,000. High tax assessment in agriculture resulted in: labor out-migration of 2,183 jobs; capital out-migration of {dollar}37,224,000; household welfare loss of {dollar}42,998,000; and GSP decrease of {dollar}205,180,000.