The Value of Fish Quality

International Institute of Fisheries Economics and TradeU.S. National Marine Fisheries ServiceMG Kailis Group

This paper aims to reveal consumers’ preferences for quality graded fish products based upon existing data onfirst-hand sales in Denmark. The data represents the value of fish for consumption as a non-differentiated private good.The objective is to measure the welfare gains to society of an increase in “quality” for major fish species. The demand forQuality Extra and quality A-fish is estimated using an Inverse Almost Ideal Demand System (IAIDS-model) as the functionalform of demand on first-hand sales data following the European Union established trade norms for quality-grading and sizecategories.Secondly the possibility of estimating changes in consumer surplus as the welfare gained by society of a generalincrease in quality of landed fish is discussed. However, the estimates on consumer surplus are not yet completed.The model adopted is a pricing model for the implicit price of the characteristic “quality” which necessarily is part of theproduct i.e. fish for consumption. Today the Danish market for fish does not explicitly state the “quality” of fish in theconsumers market. This is generally a credence parameter. There are no objective verifiable standards available to theconsumer and this is an element of trust in the word of the fish retailer.This paper shows the first results of adopting a revealed preference model for indirect benefit estimation on existing qualitydifferentiated fish at first-hand sales. We explicitly discuss the assumptions of “weak complementarity” and “deriveddemand” necessary to run the model.