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Abstract

This study compared two inverse demand systems, the Rotterdam inverse demand system and the Laitinen-Theil inverse demand system, to analyze the demand relationships among aquacultural products in Taiwan. Results demonstrate that the Laitinen-Theil’s inverse demand system fits the data better than the Rotterdam inverse demand system. The demand relationships among five groups of aquacultural products, tilapia, milkfish, other aquaculture fish, shrimp, and shellfish were examined. Monthly transaction prices from local fish markets and per capita consumption for the period from July 1990 through December 1995 for these five groups of aquacultural products were used in this study. Results show that milkfish has the absolute highest own-flexibility of 0.495, which is followed by shrimp, shellfish, tilapia, and other aquacultural fish with their own-flexibilities of -0.480, -0.283, -0.213, and -0.090, respectively. Results also show that a one-percent increase in aggregate quantity of aquacultural products would result in decreases in the normalized prices by 1.57%, 1.04%, 1.54%, 0.79%, and 0.80% for tilapia, milkfish, other aquacultural fish, shrimp, and shellfish, respectively.

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