A cointegration analysis of seafood import demand in Caribbean countries
Abstract:Cointegration analysis and error correction model are used to estimate seafood import demand for selected Caribbean countries. The results show that seafood import is price elastic. Exchange rate has a negative effect, while Gross Domestic Product (GDP) and tourism have positive effects on seafood imports. Import and domestic production do not have a short run causal relationship. The increase in Caribbean seafood imports is primarily due to decreasing import price and increasing domestic demand. The decline of domestic fisheries production has other causes than import competition. However, imports and domestic production have a negative long run equilibrium relationship. Tariff and production expansion policies both help producers, but tariff may reduce total economic surplus, while supply expansion can increase total economic surplus.
Document Type: Research Article
Affiliations: Department of Agricultural Economics and Rural Sociology,Auburn University, 202 Comer HallAuburnAL 36849, USA
Publication date: February 1, 2013