Price and income elasticities of selected fish commodities in Indonesia: a multi stage budgeting framework

Abstract

Price and income elasticities are considered the main important parameters in analyzing demand for fish in Indonesia. This study was estimated price and income elasticities of selected fish commodities in Indonesia. A quadratic almost ideal demand system (QUAIDS) model was used to estimate those elasticities. A multistage budgeting framework approach was applied in the model. SUSENAS (National Social Economic Survey) data of 2019 were used in this study. The selected fish commodities were Tuna-Tongkol Cakalang (Tunas), Kembung (mackerel), Mas-Nila (Carps – Tilapia) Lele (Catfish), Bandeng (Milkfish), Udang (Shrimp), Olahan (Processed fish) and other fresh fish. National elasticities of selected fish commodities were illustrated in terms of different income groups, that is, low, mediun and high. Study revealed that price elasticities were ranging of -0.7088 – -1.1686 (low income group), -0.8550 -1.5119 (medium income group) and -0.6933 - 1.1745 (high income group). Income price elasticities were ranging of 1.1167 – 1.9561 (low income group), 0.9497-1.2963 (medium income group) and 0.6538 – 0.8559 (high income group). Elasticity is greater than 1 indicating elastics, whereas less than 1 indicating inelastic.