Demand system analysis of wholesale price of salmon in Japanese market
2006
Shimizu, I.(National Salmon Resources Center, Sapporo (Japan))
The price elasticity of demand in Japanese salmon market was measured by Almost Ideal Demand System-Error Correction Model analysis to clarify the substitute and complement relations among monthly wholesale prices of salmon between 1996 and 2003. Commercial salmon circulated in central wholesale markets in ten consuming areas in Japan are classified statistically into six items: fresh "Sake", domestic frozen "Sake", salted "Sake", frozen "Masu", salted "Masu" and import frozen "Sake". Sign conditions of the own price elasticity of all items in Japanese salmon market supported the Marshallian law of demand that the demand quantity decreased when the price of goods increased. The value of own price elasticity of domestic frozen "Sake" was less than 1 and domestic frozen "Sake" showed a characteristic of necessary goods. On the other hand, the value of cross price elasticity of salted "Masu" was bigger than 1 and there were many substitute goods of salted "Masu". That accounted for the value of own price elasticity of salted "Masu" was bigger than 1. It was suggested that the price elasticity of supply of fresh "Sake" influenced the price elasticity of demand of salted "Sake" and the demand of fresh "Sake" and salted "Sake" of autumn salmon was stabilized by the increase of price elasticity of supply.
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