U.S. Demand for Selected Groundfish Products, 1967–80: Comment

Abstract

In a recent paper in this Journal, Tsoa, Schrank, and Roy (hereafter TSR) present a model of the demand for groundfish in the United States. Their modeling strategy is a departure from other analyses of this in that they estimate the reduced form of a system of inventory-price expectations equations rather than the more traditional system of demand and supply relationships. Using data from 1967 to 1980, they estimate a single equation derived from their simultaneous equations model. They find perverse elasticities; the demands for cod, haddock, and redfish (ocean perch) fillets are all inelastic in the short run, and all product forms (including frozen fish blocks) are income elastic. They thereby concluded that since the demand for various groundfish fillets is price inelastic, a recession in the United States will exert strong downward pressure on prices for these products if they are to be absorbed by the U.S. market (p. 489). They also draw conclusions as to the expected result of extended fisheries jurisdiction (EFJ): If EFJ results in an increase in the supply of fish products in the United States due to both increased do-