The effect of Norwegian biomass on French import prices of salmon

Abstract

In this master thesis, I have investigated the relationship between the Norwegian biomass of farmed salmon and import prices of different salmon products in France. By using an Inverse Almost Ideal Demand System (IAIDS) model, imports and biomass data has been modeled. This is a new perspective in salmon price analysis, and has not been performed previously. Own- and cross-price flexibilities and scale flexibilities have been calculated for all the products. The effects on price of growth in biomass and import quantity have also been modeled and presented. The estimated flexibilities of the products are also a new, and few, if none, comparable studies of similar aggregated groups exist. The results of the investigation permit to state that the strongest relationship between biomass and import prices is found in the fresh products. I have not been able to find significant and reliable results in the frozen and smoked category. The flexibilities are to some extent in accordance with the limited literature in the field. The effects of changes in import and biomass are the most sensitive for changes in import quantity. This is a result of limited significant and reliable biomass flexibilities, and that biomass is indirectly affecting import prices.