Daniel V. Gordon

Searching for price parity in the European whitefish market

The purpose of this paper is to test for price parity across different species of whitefish in the European Union. Price parity is defined by a system of cointegrated prices and would be evidence of a single European market for whitefish. Whitefish are of interest because EU fishers receive the largest share of their income from these fish species. Notwithstanding the single market policy of the EU, by establishing national and regional associations to stabilize or increase the local price of fish, fishers operate as if the European market is made up of separate submarkets with price being determined largely within each submarket. If whitefish markets were price cointegrated such associations would be largely ineffective. In that case, what are required are regulations that encompass the European market.

On Prices of Fresh and Frozen Cod Fish in European and U.S. Markets

The purpose of this paper is to test for price linkages among European (France, Germany, and U.K.) and U.S. prices of whole fresh cod and frozen cod fillets. In testing for a cointegrated system, we use both the two-stage Engle-Granger and Johansen procedures. Short-run price dynamics are measured using an error-correction model. Based on monthly import price observations from 1980 to 1992, the empirical results show no long-run price relationships for fresh cod between European and U.S. markets, but we do measure long-run price linkages for frozen cod fillets. Within Europe the markets for both fresh and frozen cod product are well integrated. The U.S. fresh cod market is distinct and separate from European markets, while the U.S. frozen cod market shows no short-run links to European markets. There is weak evidence for a long-run international market in frozen cod fillets.

The Economic Structure of Harvesting for Three Vessel Types in the Norwegian Spring-Spawning Herring Fishery

Norwegian spring-spawning herring (Clupea harengus) is the largest fish stock in the North Atlantic and is harvested by many nations. The introduction of new technology in the 1960s resulted in a substantial increase in the efficiency of the fishing fleet. As a consequence, the stock was fished almost to extinction by the end of the 1960s. In the 1990s, the stock showed healthy growth and Total Allowable Catch (TAC) quotas have increased. This paper adds to the understanding of the harvesting process by providing measurements of the economic structure of the harvesting technology. For this fishery, Norway receives the largest share of the internationally determined TAC quota, and thus, the focus will be to investigate the harvesting process for three vessel types in the Norwegian fishing fleet: purse seiners, trawlers, and coastal vessels. Vessel-level cost and revenue data are available annually for these vessel types for the three-year period 1994-96. Estimates of input elasticities, economies of scale, and cost elasticities for a two-output cost function are reported.

A natural monopoly in natural gas transmission

Abstract In this article, we test for subadditivity in the cost structure associated with transporting natural gas by Trans-Canada Pipelines Ltd. and measure for possible cost savings from increased competition that could be realized by removing the monopoly status granted by the National Energy Board. In measuring subadditivity, we apply both the Baumol et al. (Contestable Markets and the Theory of Industry Structure (1982)) and the Evans and Heckman (Am. Econ. Rev. 764 (1984) 613) procedures. Our results show evidence of subadditivity in the cost structure, and consequently, the possible benefits from increased competition resulting from splitting up the monopoly could be offset by the sacrifice of scale efficiencies.

Of fish and whales: the credibility of threats in international trade disputes

Abstract In protection of fisheries resources, whales, and other marine mammals, the US has used the threat of trade sanctions to force changes in environmental policies of other nations. Nations threatened with trade action must assess the credibility of a threat to impose substantial costs on the economy. The credibility of a threat will depend on the ability to divert sanctioned exports to other markets, the price impact of such diversion, and the time required for the diversion to take place. Using as an example the 1993 US threat to impose trade restrictions on imports of fish from Norway as a result of Norways decision to re-commence commercial whaling, this paper provides an example of a formal assessment procedure to empirically examine the credibility of threatened trade action.

A comparative study of production factors and productivity for shrimp farms in three Asian countries: Bangladesh, India, and Indonesia.

The purpose of this paper is to provide a comparative index characterization of shrimp production in Bangladesh, India and Indonesia. We approach the problem using a profit decomposition procedure to identify the separate effects of prices, pond size and productivity on the profits of individual farms. This profit decomposition approach relies on application of the Törnqvist index in measurement. Data are made available by the WorldFish Centre, Malaysia. The data represent production, pond area, unit price of output and inputs and corresponding quantities. The results show that pond size is important not only because we observe a strong positive relationship with profits but that the results are suggestive of important scale effects in production. These results indicate that small farms in all three countries are disadvantaged not because they are unproductive or lack the skills to manage but rather that many farms are too small to achieve economic potential.

Price Determination and Demand Flexibilities in the Ex-Vessel Market for Tuna in the Republic of Maldives

This article assesses the relationship between export and ex-vessel prices for tuna fish in the Republic of Maldives. The economic welfare of fishermen depends to a great extent on the price received for fish. The price of fish is set by external factors exogenous to fishermen. It is important in understanding the welfare of fishermen to understand the price links in the fish supply chain and the factors that impact the ex-vessel price of fish. This article uses three models to investigate price determination in the ex-vessel market; ARMAX, inverse demand equation and margin equation. The results provide statistically important price relationships and price flexibilities on asymmetric export price effects.

Vertical and Horizontal Integration in the Uganda Fish Supply Chain: Measuring for Feedback Effects to Fishermen

This article contributes to the empirical price transmission literature with a statistical investigation of market prices in the fish supply chain for Uganda. We are particularly interested in the extent of ex-vessel prices impacting links downstream in the fish supply chain. We test for vertical and horizontal co-integration for five important fish species using the Johansen vector error correction model. We search for price leadership using the Toda and Yamamoto procedure to test for Granger causality. And ARIMA models are used to forecast ex-vessel prices. Our results show that ex-vessel prices are only weakly related to downstream markets.

Testing the export-growth hypothesis: some parametric and non-parametric for Ghana

To test the export-growth hypothesis for Ghana, four parametric causality models (the Granger model, the Sims model, the modified Sims model, the Akaike Final Prediction Error model) and the non-parametric multiple rank F-test model of Holmes and Hutton are estimated for a variety of variable specifications and lag structures. Consistent with other published research, causality conclusions are sensitive to the different causality tests used, to the lag specification of the variables and to the structure of the error terms. The interesting contribution of this research is in comparing results derived from parametric and non-parametric models and in showing that violation of the normality assumption leads the Granger model to the apparently incorrect conclusion that GDP causes exports.

An Empirical Model of Tax Convexity and Self-Employment

Do progressive marginal income tax rates discourage self-employment? We assume risk neutrality to construct an implicit surtax on stochastic income relative to steady income, arising from a convex tax schedule. It is computed as part of a structural probit model with earnings equations and a tax simulator. The tax convexity variable and the net-of-tax income difference between self- and paid employment have the predicted signs and high levels of statistical significance for the probability of self-employment. A simulated flat tax reform suggests the tax effects are small.