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.Exchange rates, flexibilities, inverse demand system, Demand and Price Analysis, International Relations/Trade, Q13, M30, F10,

Factors Affecting the Decision Process of Catfish Consumers: An Empirical Study in the Two Biggest Cities in Vietnam

The consumption of catfish in Vietnam has not grown enough to match their increased production. The objective of this study is to explore the factors that influence the decision process of catfish consumers in Vietnam. The findings provide information for the Vietnamese catfish industry to better attract more domestic consumers to eat catfish. This study seeks to address its objective by examining the relationships that exist between the experiences, perceptions of product attributes, preference, market constraints, and consumption levels of consumers for catfish products. Data collected in the two biggest cities in Vietnam is analyzed by using multivariate techniques based on a partially-recursive model. Factors such as age, region, ease of preparation, perceptions of catfish taste, odour, and fat along with beliefs that catfish are safe and inexpensive are found to significantly influence the decision-making process

Price and Quality Effects of Generic Advertising: the Case of Norwegian Salmon

NICPRE 03-02; R.B. 2003-05In this paper, a two-equation sample selection model is used to estimate a household demand function for salmon incorporating domestic generic advertising. The twoequation estimation procedure, based on purchase and unit value equations, allows us to handle heavily censored panel data for salmon purchases by Norwegian households and the quality effects simultaneously. Unit values of the aggregated salmon commodity calculated from the observed expenditures and quantities are hypothesized to represent the average quality of the purchased commodity. Advertising effects on both purchases and unit values are investigated. The model also allows us to separate the effects of conditional purchases and purchase probabilities. Results indicate that most (78%) of the advertising effect is through the change of non-purchase occasions to purchase occasions, and that generic salmon advertising induces Norwegian households to spend more money on salmon. However, advertising causes households to select more expensive products rather than increasing their purchased quantities

Estimation of Censored La/Aids Model With Endogenous Unit Values

R.B. 2003-08In this study, we develop and estimate a censored LA/AIDS model using household-level purchase data. In addition to imposing non-negativitity constraints, we account for the endogeneity of unit value. We address the non-negativity issue using an Amemiya-Tobin approach, which imposes the adding-up condition on both observed and latent shares. We address the endogeneity of unit value by estimating share equations and unit value equations simultaneously. Given the need to evaluate high-order probability integrals, we use a simulated probability method in the model estimation. This model is applied to estimate and analyze a demand system featuring six fish and three meat commodities, using Norwegian household data

Relative Impact of the Norway-EU Salmon Agreement: A Midterm Assessment

An agreement between Norway and the European Commission specifies an increase in the export tax on Norwegian salmon entering EU markets from 0.75% to 3.00% effective 1 July 1997. Further, Norway's exports are subject to a price floor and quantity ceiling, neither of which were binding over the evaluation period. Since the tax's proceeds are to be used by Norway to fund generic marketing of Atlantic salmon, it is possible that the agreement is winwin, i.e., benefits United Kingdom and Norwegian producers alike. To test this, we use an equilibrium displacement model to estimate the agreement's effects on prices, trade flows, and producer welfare. Results based on data through 1999 suggest the agreement is indeed win-win, but that currency realignments and feed quota policy can easily neutralize or obscure the effects

Relationship Between Partial and Total Responses to Advertising with Application to U.S. Meats

Buse’s concept of total response is extended to advertising effects. Results suggest that partial advertising elasticities overstate advertising’s ability to increase market demand. One implication is that advertising bans (e.g., for alcohol and tobacco) are apt to be less effective than indicated by partial advertising elasticities estimated from econometric models. Extending the concept of total response to price effects, the total advertising “flexibility” sets the lower bound on the optimal advertising-sales ratio and subsumes the Dorfman-Steiner and Nerlove-Waugh theorems as special cases. Applying the total flexibility concept to U.S. meats, results suggest the beef, pork and poultry industries are under-investing in advertising. However, in the case of beef this conclusion hinges on the assumption that retaliation by pork brand advertisers is minimal, which needs to be tested

Price and Quality Effects of Generic Advertising: The Case of Norwegian Salmon

In this paper, a two-equation sample selection model is used to estimate a household demand function for salmon incorporating domestic generic advertising. The twoequation estimation procedure, based on purchase and unit value equations, allows us to handle heavily censored panel data for salmon purchases by Norwegian households and the quality effects simultaneously. Unit values of the aggregated salmon commodity calculated from the observed expenditures and quantities are hypothesized to represent the average quality of the purchased commodity. Advertising effects on both purchases and unit values are investigated. The model also allows us to separate the effects of conditional purchases and purchase probabilities. Results indicate that most (78%) of the advertising effect is through the change of non-purchase occasions to purchase occasions, and that generic salmon advertising induces Norwegian households to spend more money on salmon. However, advertising causes households to select more expensive products rather than increasing their purchased quantities

ESTIMATION OF CENSORED LA/AIDS MODEL WITH ENDOGENOUS UNIT VALUES

In this study, we develop and estimate a censored LA/AIDS model using household-level purchase data. In addition to imposing non-negativitity constraints, we account for the endogeneity of unit value. We address the non-negativity issue using an Amemiya-Tobin approach, which imposes the adding-up condition on both observed and latent shares. We address the endogeneity of unit value by estimating share equations and unit value equations simultaneously. Given the need to evaluate high-order probability integrals, we use a simulated probability method in the model estimation. This model is applied to estimate and analyze a demand system featuring six fish and three meat commodities, using Norwegian household data