Economic impacts for Scottish and UK seafood industries post-Brexit: report
The report presents findings from research examining the possible impacts of EU exit on Scottish and UK seafood industries.
Appendix J: Sensitivity Analysis
Sensitivity analysis has been carried out for Scenarios 1 and 4 by changing the degree to which species from different sources are substitutable, and the degree to which supply can expand to meet increased demand. In the model simulations the elasticity of substitution was assumed to be 5 for fish species and 2.5 for shellfish species.
The results for the original model simulations are replicated in Table J.1 and Table J.5, respectively. These include tariff and NTM changes and, for Scenario 1, quota allocation changes.
The model simulations are replicated with the supply elasticity increased from 1 to 3 (Table J.2 and Table J.6), and decreased to 0.5 (Table J.3 and Table J.7). They are also replicated with the substitution elasticity halved to 2.5 or 1.25 (Table J.4 and Table J.8). The reduction in the substitution elasticity means that imports from different sources are less substitutable, hence as EU tariffs rise on UK exports, consumers are less able to switch to other suppliers, and so we see a smaller impact on all the quantities.
Table J.1. Scenario 1: Original model outputs (supply elasticity 1, substitution elasticity 5 or 2.5)
| Species | Price index | Output (Q) | Output (V) | Exports | Imports |
|---|---|---|---|---|---|
| Cod | -1.12 | 8.78 | 6.99 | 7.37 | 5.09 |
| Crab | -0.23 | 0.45 | 0.36 | 0.60 | 3.18 |
| Haddock | -4.50 | 21.17 | 12.38 | 26.80 | -7.59 |
| Hake | -6.60 | 65.94 | 61.31 | 62.59 | -5.25 |
| Herring | 8.31 | 118.97 | 88.92 | 88.96 | -18.10 |
| Mackerel | 5.41 | 53.39 | 37.68 | 37.43 | -20.84 |
| Nephrops | -1.48 | 4.80 | 2.99 | 3.53 | -2.53 |
| Saithe | -47.21 | 85.91 | 37.70 | 108.64 | -67.90 |
| Salmon | -0.63 | 2.03 | 1.53 | 3.58 | 0.60 |
| Scallop | -2.43 | -0.30 | -0.64 | 0.03 | 1.49 |
Table J.2. Scenario 1 sensitivity – supply elasticity =3
| Species | Price index | Output (Q) | Output (V) | Exports | Imports |
|---|---|---|---|---|---|
| Cod | -2.51 | 8.78 | 6.99 | 7.66 | 12.29 |
| Crab | -0.50 | 1.03 | 0.81 | 1.15 | 6.30 |
| Haddock | -5.08 | 21.20 | 11.71 | 32.72 | -7.63 |
| Hake | -7.55 | 65.94 | 60.73 | 63.11 | -2.53 |
| Herring | 7.66 | 118.98 | 88.82 | 88.91 | -16.94 |
| Mackerel | 4.74 | 53.40 | 38.09 | 37.90 | -19.78 |
| Nephrops | -1.47 | 4.80 | 2.86 | 3.53 | -1.31 |
| Saithe | -27.93 | 86.04 | 50.16 | 118.13 | -56.75 |
| Salmon | -0.91 | 5.44 | 4.50 | 10.17 | 1.90 |
| Scallop | -3.38 | -0.81 | -1.12 | 0.06 | 3.17 |
Table J.3. Scenario 1 sensitivity – supply elasticity = 0.5
| Species | Price index | Output (Q) | Output (V) | Exports | Imports |
|---|---|---|---|---|---|
| Cod | -0.63 | 8.77 | 6.98 | 7.24 | 2.65 |
| Crab | -0.13 | 0.24 | 0.20 | 0.35 | 1.83 |
| Haddock | -4.06 | 21.17 | 12.91 | 25.32 | -7.50 |
| Hake | -6.09 | 65.94 | 61.65 | 62.60 | -6.11 |
| Herring | 8.45 | 118.97 | 88.96 | 88.97 | -18.41 |
| Mackerel | 5.41 | 53.39 | 37.50 | 37.23 | -20.87 |
| Nephrops | -1.56 | 4.80 | 3.07 | 3.55 | -3.12 |
| Saithe | |||||
| Salmon | -0.44 | 1.08 | 0.76 | 1.81 | 0.27 |
| Scallop | -1.72 | -0.12 | -0.40 | 0.02 | 0.79 |
N.B. Model does not solve for saithe.
Table J.4. Scenario 1 sensitivity – substitution elasticity halved (2.5 and 1.25)
| Species | Price index | Output (Q) | Output (V) | Exports | Imports |
|---|---|---|---|---|---|
| Cod | -1.12 | 8.78 | 5.66 | 5.32 | 5.05 |
| Crab | -0.23 | 0.48 | 0.42 | 0.15 | 1.34 |
| Haddock | -4.36 | 21.20 | 8.70 | 20.12 | -6.23 |
| Hake | -6.71 | 65.94 | 55.98 | 57.10 | -4.78 |
| Herring | 9.58 | 118.98 | 59.47 | 59.57 | -18.48 |
| Mackerel | 7.00 | 53.39 | 28.68 | 28.85 | -18.44 |
| Nephrops | -1.74 | 4.80 | 1.08 | 1.36 | -1.39 |
| Saithe | -48.37 | 86.04 | 24.22 | 83.21 | -60.02 |
| Salmon | -0.63 | 1.91 | 1.31 | 3.10 | 0.50 |
| Scallop | -2.39 | -0.12 | -0.30 | 0.01 | -0.12 |
Table J.5. Scenario 4: Original model outputs (supply elasticity 1, substitution elasticity 5 or 2.5)
| Species | Price index | Output (Q) | Output (V) | Exports | Imports |
|---|---|---|---|---|---|
| Cod | 1.20 | -9.27 | -7.57 | -11.20 | -5.41 |
| Crab | 0.16 | -3.75 | -2.48 | -6.33 | -2.20 |
| Haddock | 3.47 | 1.95 | 4.58 | -7.19 | 0.66 |
| Hake | 1.96 | -15.91 | -14.61 | -15.83 | -0.84 |
| Herring | 5.26 | -10.48 | -8.43 | -8.59 | -9.53 |
| Mackerel | 4.84 | -5.00 | -3.69 | -4.22 | -8.79 |
| Nephrops | 3.76 | -9.01 | -1.88 | -3.25 | -3.27 |
| Saithe | 1.46 | -4.71 | -2.89 | -9.44 | -3.07 |
| Salmon | 3.28 | -2.19 | -0.61 | -5.69 | -3.20 |
| Scallop | 2.37 | -9.85 | -4.38 | -6.86 | -1.48 |
Table J.6. Scenario 4 sensitivity – supply elasticity =3
| Species | Price index | Output (Q) | Output (V) | Exports | Imports |
|---|---|---|---|---|---|
| Cod | 2.65 | -18.80 | -15.64 | -23.04 | -11.55 |
| Crab | 0.33 | -6.94 | -4.69 | -11.81 | -4.12 |
| Haddock | 4.23 | 5.83 | 8.42 | -15.16 | -0.47 |
| Hake | 2.76 | -36.09 | -33.83 | -36.71 | -1.79 |
| Herring | 10.37 | -20.80 | -17.11 | -17.48 | -17.79 |
| Mackerel | 8.75 | -9.50 | -7.28 | -8.56 | -16.68 |
| Nephrops | 4.90 | -14.61 | -4.59 | -7.23 | -6.75 |
| Saithe | 1.74 | -9.23 | -6.54 | -20.06 | -7.52 |
| Salmon | 4.23 | -3.69 | -1.56 | -13.81 | -9.53 |
| Scallop | 3.15 | -16.65 | -8.41 | -12.96 | -3.04 |
Table J.7. Scenario 4 sensitivity – supply elasticity = 0.5
| Species | Price index | Output (Q) | Output (V) | Exports | Imports |
|---|---|---|---|---|---|
| Cod | 0.66 | -5.26 | -4.26 | -6.32 | -3.01 |
| Crab | 0.09 | -2.22 | -1.45 | -3.74 | -1.30 |
| Haddock | 2.70 | 0.74 | 2.92 | -4.00 | 0.81 |
| Hake | 1.32 | -8.66 | -7.87 | -8.53 | -0.48 |
| Herring | 3.02 | -6.00 | -4.78 | -4.87 | -5.62 |
| Mackerel | 2.88 | -2.92 | -2.13 | -2.41 | -5.18 |
| Nephrops | 2.75 | -5.87 | -0.83 | -1.62 | -1.75 |
| Saithe | 1.15 | -2.76 | -1.48 | -5.22 | -1.49 |
| Salmon | 2.37 | -1.39 | -0.27 | -3.02 | -1.47 |
| Scallop | 1.71 | -6.18 | -2.51 | -3.98 | -0.79 |
Table J.8. Scenario 4 sensitivity – substitution elasticity halved (2.5 and 1.25)
| Species | Price index | Output (Q) | Output (V) | Exports | Imports |
|---|---|---|---|---|---|
| Cod | 1.21 | -8.33 | -5.64 | -7.42 | -5.35 |
| Crab | 0.16 | -3.18 | -1.30 | -2.76 | -0.96 |
| Haddock | 3.50 | 1.46 | 3.59 | -4.63 | 1.13 |
| Hake | 1.97 | -15.03 | -12.87 | -13.94 | -0.77 |
| Herring | 5.27 | -9.14 | -5.69 | -5.75 | -9.33 |
| Mackerel | 4.88 | -4.53 | -2.73 | -2.95 | -7.69 |
| Nephrops | 3.86 | -7.73 | 0.92 | 0.66 | 0.14 |
| Saithe | 1.47 | -4.10 | -1.66 | -6.02 | -1.66 |
| Salmon | 3.29 | -2.13 | -0.49 | -4.99 | -2.67 |
| Scallop | 2.44 | -8.09 | -0.60 | -1.24 | 0.12 |
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