Analysis of U.S. Catfish Fillet Market Share Using a Flexible Logistic Model

Abstract

This paper forecasts market share for U.S. frozen, farm-raised catfish fillets using alternative logit formulations. Results suggest the log inverse power transformation (IPT) performs better than the simple logit and IPT logit models, and had the smallest percentage errors for out-of-sample forecast. Estimates from the log-IPT model indicated higher price premiums of U.S. catfish fillets negatively affected market shares. As domestic fillet wholesale price levels increased relative to imported fillet price, buyers would substitute domestic catfish with imported catfish, assuming undifferentiated products. Catfish is found to be a necessity with a negative relationship between income and shares, equating sales values to consumer expenditures. Total market demand for catfish appears relatively stable following changes in the economy, typical of necessities. It suggests caution in price setting policies. A pricing strategy based on higher sales volumes to address the declining market share situation could be an effective policy measure for optimal long-run sustainability and profitability of the industry.