Øystein Myrland

The Effects of Exchange Rates on Export Prices of Farmed Salmon

The CBS inverse demand system is extended to include exchange rates. Applying the extended model to trade data for farmed salmon, results suggest export prices are at least as sensitive to changes in exchange rates as to changes in trade volume. Exchange rate pass-through (absorption into export prices) is complete for the Chilean peso and the British pound, but incomplete for the Norwegian kroner and the US dollar. This suggests producers in Chile and the United Kingdom (UK) are more affected by short-term movements in relative currency values than are producers in Norway and Rest of World (ROW). Model simulations suggest currency realignments, especially the depreciation of the Chilean peso, contributed to the 2003-04 collapse in world salmon prices.

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

Abstract 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. JEL Classification Codes: Q13, M30, F10

Effects of income growth and tariffs on the world salmon market

The effects of income growth and tariffs on salmon prices, production, and trade flows are analysed using total elasticities derived from an equilibrium displacement model of the world salmon market. Results suggest the total income elasticity in world trade for salmon is about one, which means imports worldwide will grow at about the same pace as world income. However, owing in part to policies that restrict supply response, not all exporters will share evenly in this growth, with UK producers benefiting the most and Norwegian producers the least. Within importing countries, imports are more responsive to income growth than is domestic production, which means protectionist pressures are apt to increase with affluence. US tariffs on imports from Norway and Chile are counterproductive in that they reduce world imports with little effect on the US price. Norways feed quota reduces the efficacy of US tariffs, makes imports less responsive to income, and increases price volatility. Hence, quota elimination may yield producer benefits in excess of producer losses associated with a lower world price.

On generic vs. brand promotion of farm products in foreign markets

Farm groups and their governments spend millions of dollars each year advertising agricultural products in international markets. Intuitively, country-of-origin or ‘brand’ advertising should be more profitable than generic advertising in that it enhances product differentiation and reduces free riding. However, unlike generic advertising, brand advertising decreases the demand for competing imports and lowers their prices when supplies are upward sloping. In addition to inviting retaliation, the decline in the prices of competing products erodes the price of the advertised product through second-round or ‘market feedback’ effects. In this study, we develop a generalized model for assessing the relative effectiveness of generic and brand promotion in the international market when products are differentiated by source origin and supplies are uncontrolled. Applying the model to US beef promotion in Japan, we find that when brand and generic advertising are equally efficient in the sense that they cause equivalent horizontal shifts in the group and product-specific demand curves, generic advertising is indeed more profitable for most of the relevant parameter space. Distributional analysis suggests that, with equal export supply elasticities, the gross benefits of generic advertising are distributed across exporters in proportion to the expenditure elasticities for the products in question.

Modeling market structure of the Spanish salted fish market

Abstract The Spanish market for salted fish products has been restructured over the last decade. A significant pattern is a steady increase in the consumption of frozen light salted fillets at the expense of traditional products. This study is to model the Spanish demand for salted fish using the Almost Ideal Demand System (AIDS). Our findings suggest that a significant trend exists that consumers in Spain prefer to purchase the new light salted cod fillets to traditional salted cod in general. The cross price elasticity of Norwegian salted whole cod with respect to frozen light salted fillets is significantly positive. This suggests that the light salted fillets are a strong substitute for Norwegian salted whole cod. Strong substitution effects also exist between the salted whole cod from Norway, Iceland, and the Faroe Islands. Since Norway has the dominant share of exports of traditional salted whole cod, the results overall indicate a strong challenge for the Norwegian salted fish industry to maintain its position in the Spanish market.

Advances in economics of marketing and implications for aquaculture development

Abstract This paper builds on an earlier review by Kinnucan and Wessells (1997) by discussing in some detail product differentiation, market integration, and generic advertising. The goal is to identify approaches and findings in each topical area that would appear to have relevance for aquaculture. Selected applications are given to highlight principles and to demonstrate usefulness.

Optimal Seasonal Allocation of Generic Advertising Expenditures with Product Substitution: Salmon in France

Static decision rules are derived to indicate the optimal seasonal allocation of a fixed promotion budget when substitution effects are important and prices are determined under competitive conditions. Optimal allocation decisions are governed by price elasticities of supply and demand, advertising elasticities, and consumer expenditure shares, all of which can vary seasonally. Applying the rules to Norwegian salmon promotion in France for the period 1996-98, study results suggest that the actual quarterly allocation of 4, 52, 17, 27 was inefficient in that the optimal allocation of 23, 26, 20, 31 would have enhanced producer profits by 9.8 million kroner, equal to 27% of the total promotion outlay. Ignoring product substitution distorts the allocation rule, in that optimal expenditures in the second quarter are overstated by 36%, with corresponding understatements in the remaining quarters. Overall, an even expenditure pattern is deemed more profitable than pulsing.

Innovations and Structural Change in Seafood Markets and Production: Special Issue Introduction

A large and growing body of scientific research has documented the benefits of seafood in the human diet (nesheim and yaktine 2007; FAo/WHo 2011). A rising global awareness of the benefits of seafood, together with population growth, should lead to increased seafood demand in the future. Consumers will not only demand more seafood but also increased product quality and diversity as they become wealthier (Jensen 2006). to satisfy the world’s growing seafood demand, the seafood sector must innovate in many areas. Finite global resources in terms of wild fish stocks and available areas for aquaculture, together with substantial external environmental effects, provide significant innovation pressure on the sector. despite local and global constraints due to environmental challenges and competing user interests, aquaculture has to provide most of the future growth in seafood production, since most of the world’s fish stocks are fully exploited or over-exploited (Smith et al. 2010b). during the last few decades aquaculture has been the world’s fastest growing food production technology, creating a blue revolution (Asche 2008). Furthermore, aquaculture is better positioned than fisheries to provide the product quality and diversity that future consumers will demand, as a higher degree of control with the production process facilitates innovation in both production processes and products (Anderson 2002; Asche 2008; Asche, Roll, and tveteras 2009). However, the fisheries sector must not be ignored as a future supplier of healthy, nutritious food and food diversity. Through innovation there is much scope in fisheriesbased value chains to reduce supply cost and improve product quality and safety. An important source of innovation is the government regulations that provide constraints and

Optimal promotion expenditures for salmon: The importance of international price linkages

Abstract The Dorfman‐Steiner theorem is extended to the case where the advertised good is traded and price transmission between the promoting country and international markets is incomplete. Results indicate that, relative to the perfect transmission case, imperfect price transmission enhances the industrys incentive to promote. This is especially true in instances where exports account for a significant share of the promoting industrys total sales. Applying the optimization rules to Norways promotion program for salmon, study results suggest that the observed advertising intensity of 1.54% is below the economic optimum. Specifically, to maximize producer welfare, expenditure levels would need to be approximately doubled. This suggests that any reductions in the advertising levy associated with the lapse of the Norway‐EU Salmon Agreement in 2002 would be welfare decreasing from the Norwegian producer perspective.

Relation between academic performance and students' engagement in digital learning activities

Abstract This study reports on the effect of student engagement in digital learning activities on academic performance for 120 students enrolled in an undergraduate finance course. Interactive practice and exam problem files were available to each student, and individual download activity was automatically recorded during the first 50 days of the course. Academic performance, as determined by the midterm exam, was strongly associated with deliberate practicing and problem-solving activity using the interactive spreadsheet files. Moreover, prior math grades were significant in explaining future academic performance. The findings in this study are relevant to students concerned with improving their grade and efficiently allocating their time for different study activities. Furthermore, institutions aspiring to allocate scarce resources among various modes of teaching production will find this study useful.