Publication - Research publication

Economic impacts for Scottish and UK seafood industries post-Brexit: report

Published: 5 Jun 2018
Directorate:
Marine Scotland Directorate
Part of:
Brexit, Marine and fisheries
ISBN:
9781788519755

The report presents findings from research examining the possible impacts of EU exit on Scottish and UK seafood industries.

101 page PDF

2.8 MB

101 page PDF

2.8 MB

Contents
Economic impacts for Scottish and UK seafood industries post-Brexit: report
Appendix J: Sensitivity Analysis

101 page PDF

2.8 MB

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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