The German whitefish market: An application of the LA/AIDS model using retail-scanner-data

ABSTRACT

Whitefish is one of the largest segments in the global seafood market. The whitefish market includes traditional wild-caught species; cod, pollock and Alaska pollock, and the more recent introduction of aquaculture species; pangasius and tilapia. This study specifically addresses price elasticity estimates for wild and aquacultured whitefish on the German market. For demand estimation, the general form of the Almost Ideal Demand System (AIDS) with linear approximation (LA) is used. The demand for whitefish on the German market is found to be relatively elastic. The uncompensated cross-price elasticities indicate substantial substitution between pangasius and the three wild species, yet tilapia does not seem to be a part of the larger whitefish market in Germany.

KEYWORDS:

• Almost Ideal Demand System
• consumer demand
• price elasticity seafood demand
• scanner data

Notes

Seafood is the most traded of the larger food commodities as the market for most groups of species have become global in recent decades (Tveterås et al., 2012; Asche et al., 2015).

This contradicts the finding in the literature that farmed fish prices in general are less volatile than wild fish prices (Dahl & Oglend, 2014; Asche et al., 2015).