Cathy R. Wessells

Demand Systems Estimation With Microdata: A Censored Regression Approach

Demand systems estimation increasingly makes use of household-level microdata, mainly to measure the effects of demographic variables. Data based on these household-expenditure surveys present a major estimation problem. For any given household, many of the goods have zero consumption, implying a censored dependent variable. Techniques which do not take this censored dependent variable into account will yield biased results. We utilize a censored regression approach that is computationally simple, consistent, and asymptotically efficient. The results are then presented and compared with those obtained using an uncensored technique.

Product Aggregation, Market Integration, and Relationships between Prices: An Application to World Salmon Markets

Relationships between prices of goods have held interest within economics in at least two areas - market integration and product aggregation. There is a close relationship between market integration and aggregation, although this has not received much attention in the more recent literature. This relationship may increase the usefulness of market integration studies. In this paper, these relationships are developed and illustrated by an application to the world salmon market. It is shown that the Law of One Price holds for an international market with five salmon species. This result has significant implications for the world salmon market regarding both product aggregation in demand analyses and international trade policy.

On Price Indices in the Almost Ideal Demand System

A number of papers have discussed the relationship between the Almost Ideal Demand System (AIDS) and its linear approximation (LA/AIDS). In this paper, it is shown that if the prices in the system are normalized to one, the AIDS and LA/AIDS representations are identical at the point of normalization. Also, at the point of normalization, the expressions for price and expenditure elasticities from both systems are identical. Copyright 1997, Oxford University Press.

Generalized Models of Japanese Demand for Fish

Given a relative lack of knowledge about Japanese consumer preferences for fish, Japanese fish demand is modeled using both Marshallian (ordinary) and inverse demand systems, each of which nests a number of competing specifications. Results indicate that the inverse demand systems dominate the ordinary demand systems in forecasting performance and in nonnested tests. The inverse system suggests that Japanese fish prices are less responsive to changes in consumption than found in previous studies. Copyright 1997, Oxford University Press.

Predicting Consumer Preferences for Fresh Salmon: The Influence of Safety Inspection and Production Method Attributes

A rank-ordered logit model is estimated using data collected by a mail survey of consumers in the northeastern and mid-Atlantic United States. The methodology, based on conjoint analysis, determines the average relative importance and value of three product attributes for fresh salmon (seafood inspection, production method, and price), and estimates the relative attractiveness of particular products to consumers. When used in combination with demographic data and responses to questions on perceptions, the analysis suggests market segmentations and potential marketing strategies based on the heterogeneity in preferences among consumers.

Consumer Perceptions of Aquaculture Products

The consumption of seafood products, including aquacultural products, significantly increased during the 1970s and 1980s. However, during the late 1980s and early 1990s, per capita seafood consumption declined. The U.S. Department of Agriculture reports that current per capita consumption of seafood products is estimated at around 14.9 pounds, down from a peak of 16.1 pounds in 1987 (USDA). Uncertainty in the seafood supply has contributed to retail seafood prices rising faster than prices for other meat products (Harvey). To reduce the fluctuation in retail seafood prices, there is a need to stabilize production and offer consistency in supplies. However, consistency in the seafood supply can be expected to come primarily from aquaculture because of the problems of overutilization of natural or wild stocks (United Nations). Proponents of aquaculture are advocating its commercial expansion. However, several problems must be resolved before aquacultures potential can be achieved. The first problem lies in the biological potential of a species to survive in an aquaculture environment. The second factor deals with the consumers willingness to buy aquaculture products. The stiff competition offered by the beef, pork, poultry, and wild fisheries industries requires the aquaculture industry to use effective marketing strategies. This study focuses on the second issue raised regar ing the willingness of consumers to purchase products obtained from either the wild fishery or aquaculture. In particular, it deals with consumer preferences for fresh finfish and shellfish products purchased for home preparation and consumption in northeastern and MidAtlantic households.

Ecolabeling Seafood for Sustainable Production: Implications for Fisheries Management

Demand for environmental quality of a fishery product and its effect on the incentive to manage fisheries sustainably is analyzed using bioeconomic modeling. The paper examines the effectiveness of an ecolabel in achieving sustainable fisheries production under open-access, limited-access and optimally managed fisheries with price premiums for ecolabeled products that are either constant or a function of sustainability criteria. In addition, the paper investigates the effect of placing an ecolabel on the rate of recovery of an overfished stock.

Toxic Algae Contamination and Demand for Shellfish: A Case Study of Demand for Mussels in Montreal

Toxic algae blooms are a worldwide phenomena, which appear to be increasing in frequency and severity. These natural events cause product contaminations that often have significant economic consequences, including supply interruptions due to closed fishing grounds, losses from human illness, and losses due to a decline in demand for the affected products. This paper evaluates the impacts of a toxic algae bloom contamination event on demand for unaffected shellfish. As an empirical example of the economic losses the shellfish industry experiences for these events, demand for mussels in Montreal is estimated using firm-level data and proxies for consumer information, during and after domoic acid contamination of Prince Edward Island mussels. Sales losses due to decreased demand are calculated. Implications of this issue for seafood safety and management policies are discussed.

Seasonality in Japanese household demand for meat and seafood

The United States is the largest single exporter of seafood, beef, and beef products to Japan, and was the third largest source for pork in 1992. A better understanding of Japanese demand for meat and seafood is important in two regards. First, Japan is generally viewed as a tough market to enter, having many nuances and subtleties not well understood by Westerners accustomed to Western habits and preferences. Second, the United States faces strong competition from Canada and Australia in the beef market and from Taiwan and Denmark in the pork market. This study is designed to help US exporters to better understand Japanese preferences for meat and seafood through an understanding of seasonal effects on demand for these goods.

Marketing research paradigms for aquaculture

Abstract A basic premise of this review is that the traditional agricultural economics marketing research paradigm is of limited value for addressing many of the key marketing issues affecting aquaculture. These issues include how to get consumers to recognize and accept new or slightly differentiated products, and how to design products that more nearly match consumer preferences. Accordingly, we stress an ‘industrial style’ market‐development approach to aquacultural marketing research that emphasizes product differentiation and market segmentation. The focus is pragmatic in that we bring into play managerial strategies (e.g. demand‐function modification and segment development) that are integral to implementing research findings. Empirical studies pertaining to seafood demand and preference articulation are selectively reviewed to illustrate concepts and to highlight research applications.