Demand Elasticities for East African Fish Exports to the European Union

Abstract

In this study, the authors estimate demand elasticities for East African fish exports to the European Union. Today, fish is one of the most important renewable resources in East Africa, and ranks as the region's highest nontraditional agricultural export earner. Furthermore, fish represents a vital contribution to the food and nutritional security of millions of people in the region and the sizeable export revenue it generates plays an important role in advancing the region's development strategy of increasing overall foreign exchange earning capability. In this respect, elasticity is one of the basic indicators when discussing policy impacts, but currently there are no elasticity estimates for East Africa's fish export demand to guide trade policy formulation. The results for the estimated export demand equation showed evidence of lower price and higher income elasticities, implying that, on one hand, the European Union's demand for East Africa fish is more sensitive to income changes than price changes and, on the other hand, the East African fishery industry can simultaneously reduce the rate of resource use while boosting fishery income through higher prices.