A Further Look at Flexibilities and Elasticities

Huang, Kuo S.

doi:10.2307/1243633

Cited by 33 publications

(22 citation statements)

References 14 publications

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“…The corresponding price elasticities of ex-vessel demand are most likely elastic, since the reciprocal of the price flexibility values for skipjack and yellowfin are −1.25 and −4.54, respectively. Since the reciprocal of the price flexibility forms the lower limit, in absolute terms, of the price elasticity (Houck 1965), the difference of the true price elasticity from the flexibility reciprocal depends on the entire matrix characterized by the substitution and complementarity of price flexibilities with other commodities (Huang 1994;Eales 1996).…”

Section: Results: Inverse Demand Analysis Of the Bangkok Marketmentioning

confidence: 99%

Fewer Fish for Higher Profits? Price Response and Economic Incentives in Global Tuna Fisheries Management

Sun¹,

Chiang²,

Guillotreau³

et al. 2015

Environ Resource Econ

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This paper evaluates industry-wide economic incentives arising from changes in product prices in an industry exploiting a common renewable resource (tropical tunas) that is regulated via output limits. Changes in prices alter economic incentives by affecting revenues, profits, conservation, and nonmarket public benefits. Economic incentives in industries exploiting common resources have been examined from multiple angles. However, industry level variation in market prices arising from changes in public regulation has not been explored. We analyse the impact on economic incentives due to changes in output limits and market prices through estimation of ex-vessel price and scale flexibilities for imported skipjack and yellowfin in Thailand's cannery market. The unitary scale flexibility, estimated B Fu-Sung Chiang

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Section: Results: Inverse Demand Analysis Of the Bangkok Marketmentioning

confidence: 99%

Fewer Fish for Higher Profits? Price Response and Economic Incentives in Global Tuna Fisheries Management

Sun¹,

Chiang²,

Guillotreau³

et al. 2015

Environ Resource Econ

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“…Alt (1942) discovered that price flexibility is designated by negative values and inflexibility by positive values. According to Huang (1994), price flexibilities are widely used in economic analyses for making agricultural pricing decisions. Price flexibility provides shrimp producers with the ability to forecast the price they will receive for their shrimp as the total supply increases or decreases.…”

Section: Related Literaturementioning

confidence: 99%

“…With this information, producers will be able to adapt production schedules around estimated prices to maximize profits. Unfortunately, few studies examine price flexibility estimates from an inverse demand system (Alt 1942;Christensen & Manser 1977;Houck 1965;Houck 1966;Huang 1994;Moore 1919), and even fewer provide flexibility estimates for agricultural cash crops such as shrimp. This important economic area has been overlooked in the international shrimp industry due to lack of experience about the requirements for modeling price flexibilities.…”

Section: Related Literaturementioning

confidence: 99%

Price flexibility and international shrimp supply

Keefe

Jolly²

2001

Aquaculture Economics & Management

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This paper provides an in-depth analysis of shrimp price flexibility and the impact of decreases in quantity supplied of shrimp on world price. Seemingly Unrelated Regression (SUR) is utilized to determine price flexibility of shrimp and changes in quantity supplied on world shrimp price. The key objective of this paper is to use Huang's direct procedure and Eales' indirect technique for calculating price flexibilities to evaluate the effects of a reduction in quantity supplied of 5%, 10%, 20%, and 30% from shrimp aquaculture sources on world price. Estimated price flexibility for the quantity supplied of aquaculture shrimp was -0.32. A 5% decrease in quantity supplied increases price by 6%, while a 10 % decrease, increases price by 14%. A decrease in quantity supplied of 20%, increases price by 22%, but a 30% decrease, increases price by 36%. The results indicate that if world supply should plummet, due to deteriorating environmental conditions, such as disease or pollution, world shrimp price will increase substantially.

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“…The issue is important since causality matters, both for the subject potentially analysed and for the results obtained. Despite the theory states that the own-price elasticity in ordinary and inverse demand systems is equal when inverted for demand systems with well defined preference structures 2 , studies show that prices systematically are estimated to be more sensitive to changing quantities in ordinary than inverse demand estimations (Houck 1966, Huang 1994). There are several reasons for this.…”

Section: Introductionmentioning

confidence: 99%