Abstract:
An inverse system framework is followed in this paper to analyse the process of price formation in the Sydney
Fish Market for the quota species of Australia s South East Fishery. The log-linear version is supported by the data and
the system is estimated using the seemingly unrelated regression (SUR) technique. In all but one case, own-price
flexibility coefficients were observed to satisfy the theoretical expectation of the general price-quantity relations and to
be less than one in absolute value, which indicates an inflexibility of real wholesale prices to their corresponding
quantities. It is also found that the majority (13 out of 16) of the quota species may be classified as normal goods. The
impact of structural change in the fishery, as a result of the introduction of the quota system, on the prices of quota
species is also examined, and it is observed that the quota management system has significantly affected the price of
twelve out of the sixteen species.
