Non-Linear AIDS for Shellfish in Rhode Island: A Market Study. Pratheesh O Sudhakaran and Hiro Uchida

Transcription

1 Non-Lnear AIDS for Shellfsh n Rhode Island: A Market Study Pratheesh O Sudhakaran and Hro Uchda

2 Introducton Seafood Industry Maor contrbutor to State economy 2.7% of total seafood producton consttute shellfsh Quahog and Scallop- 40% of total commercally harvested shellfsh Oysters- Leadng cultured shellfsh wth 7 mllons (CRMC 2014)

3 Background Shellfsh Management n Rhode Island By RI Department of Envronment and Management Desgnated as shellfsh harvest areas A steady flow of shellfsh supply n the market Management Strategy Closng of some of fshng areas To control human consumpton-safe shellfsh n market Realty often dsrupt by recurrng water qualty ssues. Inconsstences n product flow n market

4 Background Inconsstency n product flow Create prce volatlty Affect fshermen n two ways Lost revenue Future competton from other states Crtcally mportant to understand economc aspect of shellfsh resources Study- frst step nteracton of prce and quantty wthn shellfsh market.

5 Obectve Understand ex-vessel market of shellfsh n Rhode Island. Specfcally, Relatonshp between prce of shellfsh and ts quantty landed Relatonshp between prce of shellfsh and quantty of related products landed.

6 Theoretcal Model General form of IAIDS w = α + γ ln q + β ln Q Value Share of good Quantty of good Quantty Index defned as + α ln q + ln Q = α0 0.5 γ Quantty Index ln q ln q

7 Theoretcal Model Quantty ndex s non-lnear Lnearzng by usng approxmatons Stone s Quantty Index- Wdely used ln Q = w ln q Thus, Wdely used IAIDS equaton s w t = α t + γ ln q + t β w ln q

8 Theoretcal Model Our nterest- measure relatonshp between prce and quantty Prce flexblty was calculated γ + β ( w β ln Q) ϕ 1+ w γ + β ( w β ln Q) ϕ w β f = 1+ Scale flexblty w = Own-prce flexblty = Cross-prce flexblty

9 Emprcal Model Contrbuton to the lterature Compare the models- check approxmaton bas Wth approxmated Quantty Index Wth orgnal non-lnear Quantty Index Incluson of any dynamc factors Season and lagged quantty

10 Emprcal Model Our model for analyss w t = α VA t s= MA + ρ s 5 = 1 ln γ p s ln q + 5 t = 1 ν + β ln Q + ln q + α ln q + t 1 + ε 12 m= 2 t Month ln Q = α0 0.5 γ or ln Q = w ln q m + ln q xmas π = TG ln q υ π Event π +

11 Data Shellfsh landngs from SAFIS RI, MA, and VA Trp-level landng report from dealers Info about quantty, value from 2007 to 2012 Speces Consdered

12 Introducton- Speces n RI Source: Jeff Mercer, RI DEM Bay Scallop Eastern Oyster Sea Scallop Soft Shell Clams Blue Mussel Whelk

13 Result NL-IAIDS vs. IAIDS AIC test to look at goodness of ft NL-IAIDS IAIDS AIC -26,048-26,023 t-test of dfference -estmates and standard error Speces Calculated t- value Necks 0.26 Cherrystone 0.66 Chowders 0.31 Scallops 0.08 Whelk 0.30 Crtcal t-value 1.684

14 Result- Share Equaton Adusted R-Sq range from 0.56 to 0.96 Value Share of good ncrease When quantty of good ncrease When quantty of good decrease Quahog from other state- no nfluence on share Seasonal varaton n share Pattern dffer wth speces

15 Result- Prce flexblty Uncompensated prce and scale flexblty of Shellfsh n RI Necks Cherrystone Chowders Scallop Whelk Income Necks Cherrystone Chowders Scallop Whelk

16 Dscusson and Concluson Prces of shellfsh are nflexble Prce do not respond to moderate quantty change Other Shellfsh product- substtute wth each other Magntude of the relaton dffer wth speces Neglgble between cherrystone and scallop Greater mpact between necks and cherrystones

17 Caveat of the Study No oyster, mussel, and soft-shell clams Oyster and clams domnant presence Oyster-potental compettor for neck quahog Clam -compete wth cooked quahog Dd not nclude nfo from all other states Could only nclude MA and VA Long term effect of prce s warranted To ascertan comprehensve knowledge of market.

18 Questons?? Thank you