Abstract:
The fundamental objective of this analysis was to isolate and
identify the factors governing the demand for domestically produced
rainbow trout in a representative west coast market, and assess the
impact on that demand, if any, of the introduction of pansize salmon.
The approach taken in this market demand study was to identify those
variables hypothesized to determine supply and demand for rainbow
trout. Several testable hypotheses concerning the anticipated relationships
were specified. It was hypothesized that a negative relationship
would exist between the price of trout at the brokerage level
and the quantity demanded at that level. Conversely, the price of
trout at the wholesale level was hypothesized to be positively correlated
with the quantity of rainbow trout demanded at the brokerage
level. Further, the signs on the coefficients of variables accounting
for the wholesale prices of substitute items were expected to be
negative, while comparable prices at the brokerage level should be
positive, based upon the hypothesis. It was hypothesized that the
presence of Japanese trout in the market place would have a negative
impact on the quantity of domestically produced trout demanded.
Personal disposable income was hypothesized to be positively correlated
with the quantity of trout demanded. Expectations were that
seasonal factors tend to cause trout demand to fluctuate cyclically.
An econometric simultaneous equations model was specified
from which estimates of the parameters of the demand equation were
obtained using Two Stage Least Squares techniques. A recognition of
the limitations associated with the available data set necessitates the
emphasizing of the preliminary nature of these results.
Data on quantities and prices of rainbow trout and equivalent
price series for hypothesized substitutes were obtained through personal
interviews with market participants and close observers
thereof.
The results of the study, while preliminary, tend to support the
original set of hypotheses concerning the interrelationships between
quantity of domestic trout demanded and own-price, the price of close
substitutes and seasonal demand fluctuations. Somewhat unexpectedly,
the regression seems to have uncovered a negative income/quantity
demanded relationship for rainbow trout. This raises some interesting
questions which might best be addressed in terms of hypotheses
for future analysis.
