TY - JOUR

T1 - Causality in demand

T2 - a co-integrated demand system for trout in Germany

AU - Nielsen, Max

AU - Jensen, Frank

AU - Setälä, Jari

AU - Virtanen, Jarno

PY - 2011

Y1 - 2011

N2 - This article focuses on causality in demand. A methodology wherecausality is imposed and tested within an empirical co-integrated demandmodel, not prespecified, is suggested. The methodology allows differentcausality of different products within the same demand system. Themethodology is applied to fish demand. On the German market for farmedtrout and substitutes, it is found that supply sources, i.e. aquaculture andfishery, are not the only determinant of causality. Storing, tightness ofmanagement and aggregation level of integrated markets might also beimportant. The methodological implication is that more explicit focus oncausality in demand analyses provides improved information. The resultssuggest that frozen trout forms part of a large European whitefish market,where prices of fresh trout are formed on a relatively separate market.Redfish is a substitute on both markets. The policy implication is thatincreased production of trout causes a downward pressure on fresh troutprices, but frozen trout prices remain relatively unaffected.

AB - This article focuses on causality in demand. A methodology wherecausality is imposed and tested within an empirical co-integrated demandmodel, not prespecified, is suggested. The methodology allows differentcausality of different products within the same demand system. Themethodology is applied to fish demand. On the German market for farmedtrout and substitutes, it is found that supply sources, i.e. aquaculture andfishery, are not the only determinant of causality. Storing, tightness ofmanagement and aggregation level of integrated markets might also beimportant. The methodological implication is that more explicit focus oncausality in demand analyses provides improved information. The resultssuggest that frozen trout forms part of a large European whitefish market,where prices of fresh trout are formed on a relatively separate market.Redfish is a substitute on both markets. The policy implication is thatincreased production of trout causes a downward pressure on fresh troutprices, but frozen trout prices remain relatively unaffected.

U2 - 10.1080/00036840802600038

DO - 10.1080/00036840802600038

M3 - Journal article

VL - 43

SP - 797

EP - 809

JO - Applied Economics

JF - Applied Economics

SN - 0003-6846

IS - 7

ER -