Demand For Salmon Research Articles

The welfare impacts of Covid-19 on the U.S. salmon sector

ABSTRACT This research estimates the effects of COVID-19 on the U.S. supply and demand for salmon over two distinct periods. The first period reflects the first year (2020) since the COVID-19 outbreak, and the second period covers the outbreak’s second year (2021). The effects of COVID-19 on salmon prices, domestic production, and imports are analysed through graphics, elasticities, and spatial welfare economics derived from the equilibrium displacement model of the U.S. salmon market. In the first year, COVID-19 caused a reduction in domestic demand. As a result, U.S. salmon producers and consumers lost $302 million. Consumer loss accounts for 87% of this value. In 2021, however, domestic consumption recovered, with a positive effect of $447 million on consumers, outweighing the negative impact from 2020. Together, the domestic producers and consumers gained approximately $512 million. The net market gain (a combination of the first- and second-year effects) was $210 million. These results are subject to the magnitudes of change in demand and supply due to COVID-19 and transportation costs.

Waves and currents decrease the available space in a salmon cage.

Due to increasing demand for salmon and environmental barriers preventing expansion in established sites, salmon farmers seek to move or expand their production to more exposed sites. In this study we investigate the effects of strong currents and waves on the behaviour of salmon and how they choose to use the space available to them. Observations are carried out in a site with strong tidal currents and well mixed water. Using video cameras and echo sounders, we show that salmon prefer to use the entire water column, narrowing their range only as a response to cage deformation, waves, or daylight. Conversely, salmon show strong horizontal preference, mostly occupying the portions of the cage exposed to currents. Additionally, waves cause salmon to disperse from the exposed side of the cage to the more sheltered side. Even when strong currents decrease the amount of available space, salmon choose to occupy the more exposed part of the cage. This indicates that at least with good water exchange, the high density caused by limited vertical space is not so aversive that salmon choose to move to less desirable areas of the cage. However, the dispersal throughout the entire available water column indicates that ensuring enough vertical space, even in strong currents, would be beneficial to salmon welfare.

Analytic formulas for futures and options for a linear quadratic jump diffusion model with seasonal stochastic volatility and convenience yield: Do fish jump?

In this article we derive tractable analytic solutions for futures and options prices for a linear-quadratic jump-diffusion model with seasonal adjustments in stochastic volatility and convenience yield. We then calibrate our model to data from the fish pool futures market, using the extended Kalman filter and a quasi-maximum likelihood estimator and alternatively using an implied-state quasi-maximum likelihood estimator. We find no statistical evidence of jumps. However, we do find evidence for positive correlation between salmon spot prices and volatility, seasonality in volatility and convenience yield. In addition we observe a positive relationship between seasonal risk premium and uncertainty of EU salmon demand. We further show that our model produces option prices that are conform with the observation of implied volatility smiles and skews. Our work connects to a number of results that have recently appeared in the Operations Research literature.

Analytic Formulas for Futures and Options for a Linear Quadratic Jump Diffusion Model with Stochastic Convenience Yield and Seasonality: Do Fish Jump?

In this article we derive tractable analytic solutions for futures and options prices for a linear-quadratic jump-diffusion model with seasonal adjustments in stochastic volatility and convenience yield. We then calibrate our model to data from the fish pool futures market, using the extended Kalman filter and a quasi-maximum likelihood estimator and alternatively using an implied-state quasi-maximum likelihood estimator. We find no statistical evidence of jumps. However, we do find evidence for the positive correlation between salmon spot prices and volatility, seasonality in volatility and convenience yield. In addition we observe a positive relationship between seasonal risk premium and uncertainty within the EU salmon demand. We further show that our model produces option prices that are conform with the observation of implied volatility smiles and skews. Our work connects to a number of results that have recently appeared in the Operations Research literature.

The influence of quality characteristics of aquatic products on its price determination in China-A case of salmon products in supermarkets of Shanghai

The relationship between salmon prices and attributes were explored using the samples collected in supermarkets in Shanghai, China. The results showed that the price of the salmon did not have a significant relationship with the depth of orange color of salmon, unlike the results of stated preferences of western consumers in the previous studies. Whereas, smoked products had a positive relationship with price in the linear model form, and as the main importing country, Norway has the strongest positive relationship with price. In China salmon demand is expected to increase in future, salmon attributes highly appreciated in the market are different from western countries and salmon exporters need to recognize China as a special market for effective market.

The impact of media coverage and demographics on the demand for Norwegian salmon

ABSTRACTAlthough consumption is increasing, aquaculture is controversial in many countries because of the potential environmental impact, leading to substantial media coverage. In this article, we investigate the impact on demand for salmon in Norway with a single equation specification as well as a demand system. As Norway is a large salmon producer, the media coverage is highly varied. Our media coverage data can be broken down into 10 different categories, which vary from positive coverage such as cooking recipes to negative coverage of production problems such as disease. Our results indicate that in aggregate, the media coverage has little impact on demand for salmon. There are some indications that the positive coverage increases demand. There are also spillover effects relatively to other goods (cod, poultry and red meat).

Testing Advertising-Induced Rotation of Demand Curves in the EU Salmon Market

The Almost Ideal Demand System (AIDS) is estimated to examine the responses for salmon promotion conducted by the Norwegian Seafood Council (NSC) in the EU Atlantic salmon market. The model allows advertising to shift and rotate the demand curve simultaneously. EU demand is segmented by supply sources of the salmon, namely Norway, the United Kingdom, Chile, Canada, and the Rest of World. Results suggest that a 10% increase in advertising expenditure sponsored by the NSC makes the demand curve of Norwegian salmon and Canadian salmon rotate counterclockwise by 0.54% and 10.3%, respectively, and the curve for the Rest-of-World salmon rotate clockwise by 4.09%. In our empirical case of salmon demand, the impact of advertising-induced rotation on the optimal spending level and the change in producer surplus is significant when the advertising expenditure is greatly intensified, the export volume is huge and the supply is less elastic.

Exchange Rate Volatility and US Import Demand for Salmon

AbstractIn this article, a risk-augmented differential demand system is developed to test the effects of exchange rate volatility (ERV) on trade. Applying the model to data on US imports of salmon from Chile, Canada, Norway, the United Kingdom, and Rest of World (ROW), results indicate ERV reduces imports. The effect, however, is modest in that the ERV elasticities are only 15% as large as price elasticities. Overall, US imports of salmon are much more sensitive to changes in relative prices and income than to changes in ERV. Bias in the estimated price and expenditure elasticities associated with omitting the ERV variables from the model in some cases is non-trivial.

Reflections on Marine Resource Economics: Editor’s Introduction

Next article No AccessReflections on Marine Resource Economics: Editor’s IntroductionMartin D. SmithMartin D. SmithNicholas School of the Environment Duke University Search for more articles by this author Nicholas School of the Environment Duke UniversityPDFPDF PLUSFull Text Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by Marine Resource Economics Volume 27, Number 3September 2012 Article DOIhttps://doi.org/10.5950/0738-1360-27.3.197 Views: 92Total views on this site Copyright © 2012 MRE Foundation, Inc.PDF download Crossref reports no articles citing this article.

Consistent Aggregation in Fish Demand: A Study of French Salmon Demand

Product aggregation levels in the seafood demand literature are normally selected based on the research objectives rather than on empirical tests. This study applies the Generalized Composite Commodity Theorem (GCCT) developed by Lewbel (1996), to test the aggregation of French household demand of salmon. The results indicate that demand for salmon can be aggregated based on product form (i.e., fresh, frozen, and smoked salmon). These composites can be further aggregated into a single salmon category. Salmon demand can, therefore, be estimated using a system which only includes salmon equations. The composite demand elasticities estimated by the AIDS model suggest that fresh and smoked salmon significantly substitute each other in the French salmon market. This means that the estimation of an import demand system that does not include smoked salmon cannot really explain real consumer demand. The results also suggest that wild salmon is playing in a different market niche than farmed salmon.

THE DEMAND FOR FISH: A META-ANALYSIS OF THE OWN-PRICE ELASTICITY

Several studies have estimated the demand for fish using a variety of modeling procedures. In light of differences in the literature, we perform a meta-analysis of the own-price elasticity of fish from a survey of 168 studies. Regressing the own-price elasticity on study characteristics, we find the own-price elasticity is sensitive to demand specification, data issues, estimation method, and publication characteristics. Also, not only is the demand for salmon more price elastic compared to other fish, but the U.S. demand for fish is more price elastic compared to other countries.

Price interactions between salmon and wild caught fish species on the Spanish market

The introduction and rapid expansion of farmed salmon production in the mid 1980s has transformed the international market for salmon. Spain is one of the most important markets for fish within Europe and the world, and has seen a substantial increase in its demand for salmon. As in other European countries, this has raised concerns that the increased supply of salmon to Spain may have detrimental effects on the market prices of traditional (wild‐caught) species. In this paper, the extent to which salmon competes with the main traditional fish species in the Spanish market is examined using market delineation methodologies. In particular, the potential interactions between species is examined in a multivariate cointegration framework. The results suggest that salmon is at best only a weak substitute for tuna, hake and whiting, but no significant interaction could be found.

Modeling demand structure using scanner data: Implications for salmon enhancement policies

In analyzing demand structures, one is often forced to overlook the possibility of instability of parameters, due to a lack of appropriate data. This article utilizes panel data consisting of scanner (Universal Product Code) data to estimate a random coefficient model which allows testing the stability of canned salmon demand across 34 US cities from 1988 through 1992. The results provide marketing strategies for the industry and implications for publicly funded salmon enhancement policies. [Econ-Lit citations: Q22, L66, D61] © 1999 John Wiley & Sons, Inc.

The Demand for Salmon in the European Union: The Importance of Product Form and Origin

This paper addresses the importance of different product forms and their origin when considering the market structure in the European salmon market. The competition between farmed salmon and wild caught Pacific salmon has received some attention previously. However, this was before frozen Atlantic salmon emerged as an important product form in the market. This could be important as frozen Atlantic salmon is more likely to be a close substitute for Pacific salmon, which is mostly marketed frozen, than is fresh Atlantic salmon. In this paper, an almost ideal demand system is used to estimate the demand for fresh Atlantic salmon, frozen Atlantic salmon and frozen Pacific salmon in the European Union.

Trade Disputes and Productivity Gains: The Curse of Farmed Salmon Production?

Trade Disputes and Productivity Gains: The Curse of Farmed Salmon Production?

A system approach to the demand for salmon in the European Union

This study addresses the demand for salmon in the European Union. A system of demand equations are specified with an almost ideal demand system (AIDS)to analyse the demand structure for fresh, frozen and smoked salmon, using quarterly data for the period 1984–92. The time series porperties of the data series are explored, and the data series are found to be non-stationary, but cointegrated. To avoid the invalild inference and spurious regression problems that may be created by non-stationary data series,the fully modified least squares (FMLS) estimatior is utilized.

Elasticity estimates of farmed salmon demand in Spain and Italy

In this paper, estimates of the elasticities that characterize the structure of demand for farmed salmon in Spain and Italy are reported. The demand models are specified using a Box-Cox transformation of the variables and a Hausman test is used to determine price endogeneity in the demand equations. The results show short-run unitary own-price elasticity of demand for farmed salmon in both markets, but long run estimates show significant elastic price response. Short run substitution of salmon for other fish species is not observed and, for both Spain and Italy, farmed salmon is characterized as a luxury good. Interestingly, we show that our a priori expectations about own-price elasticities being lower in smaller market areas is confirmed. Finally, the results obtained are compared to other recent results reported in the salmon demand literature.

Economic Analysis of Japanese Household Demand for Salmon

AbstractThe recent glut of both wild and farmed salmon in world markets has forced producers to become aware of the need to expand their marketing efforts to ensure that demand is not outpaced by supply resulting in a further decline in prices. Japan has been a major market for wild salmon, particularly sockeye salmon from North America, since the introduction of the 200 mile Exclusive Economic Zone. As farmed supplies have continued to increase, exporters such as Norway and Chile have turned their attention to this market as well. Up until now, most of the farmed salmon exported to Japan has been targeted to the restaurant market. If exporters wish to expand their market in Japan, they may focus also on the retail market. Prior to any assessment of the potential of the retail market for fresh farmed salmon, it is useful to understand the role that salmon plays in Japanese household seafood consumption.This paper examines household consumption patterns of salmon in Japan. An econometric model is presented which estimates household demand for fresh and salted salmon focusing specifically on the effects of seasonality, regional location, and prices of other seafood products. Two systems of demand equations, one for each of two regions of Japan, are specified and estimated using monthly data on prices and expenditures to capture the effects on household demand for 12 seafood products. Results indicate that seasonality plays a significant role in the demand for many seafood products, particularly fresh and salted salmon. In addition, these seasonal effects are not necessarily the same between regions of Japan. Salmon competes with different seafood products during different times of the year. A rich variety of factors should be considered when marketing fresh aquacultured salmon in the Japanese retail market.

The demand for salmon in France: the effects of marketing and structural change

Two aspects of change in the market for salmon in France during the 1980s are the subject of econometric analysis. First, an hypothesis that a change in the distribution pattern for salmon, with a larger share of the product traded further down the distribution channel, has lead to more elastic demand is tested via demand analysis. Second, the effects of advertising in expanding the salmon market is tested.

Applying Almon-Type Polynomials in Modelling Seasonality of the Japanese Demand for Salmon

Polynomial approximations of the Almon-type are used to model seasonality of demand in the Japanese salmon market. The approach allows the modelling of demand structures with seasonally-varying slopes and levels. The estimation results are compared to a previous demand analysis using dummy variables to represent seasonal patterns.