An Empirical Investigation of Price-quantity Relations of the Quota Species of Australia's South-East Fishery
By Shekar Bose
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
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