Has Country of Origin Labeling Influenced Salmon Consumption?

Transcription

1 Has Country of Orgn Labelng Influenced Salmon Consumpton? Shawn Woznak Department of Agrbusness, Appled Economcs & Agrscence Educaton N.C. A&T State Unversty A 18 C.H. Moore Agrcultural Research Staton 1601 E. Market St., Greensboro, NC Phone: (301) E-mal: swoznak@ncat.edu Selected Paper prepared for presentaton at the Southern Agrcultural Economcs Assocaton Annual Meetng, Orlando, FL, February 6-9, 2010 Copyrght 2010 by Shawn Woznak. All rghts reserved. Readers may make verbatm copes of ths document for non-commercal purposes by any means, provded that ths copyrght notce appears on all such copes.

2 Has Country of Orgn Labelng Influenced Salmon Consumpton? Shawn Woznak N.C. A&T State Unversty Abstract Country-of-Orgn Labelng (COOL) legslaton for fsh and shellfsh was passed as part of the Farm Securty and Rural Investment Act of Farm-rased and wld-caught seafood tems caught after December 4, 2004, began COOL n Aprl 4, COOL requres retalers to dsplay the country of orgn on seafood. Usng a nonlnear AIDS model the demand for 3 salmon products was estmate--precooked, uncooked fresh, and uncooked frozen. COOL had no sgnfcant mpact on consumer demand for the three products. The 3 salmon products were all found to be nelastc, but uncooked fresh was found to be more prce senstve than precooked and uncooked frozen salmon.

3 Introducton The 2002 Farm Bll ntended that grocery stores dentfy certan commodtes beef, pork, lamb, fsh and shellfsh, fruts and vegetables, and peanuts by country of orgn. Ths provson also proposed that an ntal voluntary program be followed by a mandatory program by September 30, The Farm Securty and Rural Investment Act of 2002 (2002 Farm Bll) and the 2002 Supplemental Appropratons Act (Appropratons Act) were desgned to amend the Agrcultural Marketng Act of 1946 (Act) to requre retalers to notfy ther customers of the country of orgn of covered commodtes begnnng September 30, The law requred the Department of Agrculture (USDA) to ssue regulatons to mplement a mandatory country of orgn labelng (COOL) program not later than September 30, For much of the 2002 Farm Bll the fnal rulng was ted up n negotatons. As a result, COOL was mplemented only for fsh and shellfsh. Farmrased and wld-caught seafood tems caught after December 4, 2004, began COOL n Aprl 4, The Senate decded to delay the COOL rule, and as a result, the fnal rulng on the other commodtes was not made. However, the 2008 Farm Bll also requres that COOL be renstated. The 2008 Farm Bll adapted the same laws and same commodtes consdered n the 2002 Farm Bll wth mnor expansons. Notable nclusons, not consdered n the prevous Farm Bll were goat meat, poultry, and macadama nuts. On January 15, 2009 the USDA

4 Agrcultural Marketng Servce publshed a fnal rule for all covered commodtes combned (74FR2658) whch became effectve on March 16, 2009 (USDA, AMS, 2009). COOL mandates that retalers dstngush between wld-caught and farm-rased seafood n addton to the country labelng. Record-keepng under COOL s extensve for all nvolved n the producton, processng, transport and sale of fsh. Under COOL, fsh farmers must keep records of hatchngs, brood stocks, recevng records, purchase records, and more (USDA-AMS Farm Rased Fsh 2009). Slaughterers, processers and dstrbutors must also keep records related to recevng, purchase, qualty control, and more. Commercal fshermen must keep smlar records as fsh farmers, as well as ste maps and ther U.S. flagged vessel ID (USDA-AMS Wld Fsh 2009). The USDA Agrcultural Marketng Servce has a lst of requred documentaton under COOL. Economc theory suggests that COOL can confer both costs and benefts to buyers and sellers. When markets are performng as expected, COOL does not change consumer s wllngness to purchase the product because sellers wll voluntarly provde labels f consumers are wllng to pay for ther costs, causng COOL to be reflected n the consumer demand. Snce COOL was mplemented only for seafood n Aprl 2005, t s the only commodty for whch data reflectng consumer response to ts mplementaton s avalable. The objectve of ths paper s to evaluate the nfluence of COOL on consumer demand for 3 groups of salmon products.

5 The next secton presents an overvew of the salmon ndustry. The secton after that descrbes connecton between the Tarff Act of 1930 and COOL. Next s a descrpton of how the data was compled. Ths s followed by a descrpton of the nonlnear almost deal demand system model. Ths s followed by the emprcal results and dscusson. Summary and concludng remarks close the paper. Salmon Industry Overvew Salmon s the fourth most traded fshery product n the world, representng 11 percent of trade value. Growth n salmon trade s drven by ncreased aquaculture n the Amercas and Europe (FAO 2009). Aquaculture has ncreased demand and consumpton worldwde for salmon snce the 1980s due to a steady avalablty throughout the year (FAO 2009). Farmed salmon has ncreased n market share relatve to wld-caught salmon and the decreasng prce (FAO 2007). The average world prce for salmon fell from $6.10/klogram to $3.20/kg from 1988 to Salmon s one of the top 5 speces groups for aquaculture n the world percent of the world s farmed salmon comes from Western Europe, manly n the north (FAO 2007). It has eclpsed shrmp as the top aquaculture speces group produced n Latn Amerca and the Carbbean (FAO 2009). Norway s the largest producer of farmed salmon, wth 33 percent of the world s producton, followed by Chle wth 31 percent (FAO 2009). The Unted States farm-level sales from aquaculture totaled over $672 mllon (NASS 2005). Salmon aquaculture represents only 6.1 percent of commercal aquaculture for food fsh producton n the U.S., totalng over $41 mllon n farm-level sales. Farm-

6 rased salmon sold for an average of $1.81 per pound at the farm-level (NASS 2007). Domestc producton of salmon flets and steaks s second to Alaskan pollock, wth almost 71 mllon pounds produced (NMFS 2008). The Unted States s thrd n per capta consumpton of seafood, behnd Japan and Chna. The Unted States per capta consumpton of seafood products was 16 pounds n 2008, and ncrease from 15.2 pounds n 1998 (NFI 2009) wth per capta consumpton of all fllets and steaks growng from 3 pounds n 1996 to a record 5.2 pounds n 2006, before droppng to 4.8 pounds n Salmon was thrd among per capta seafood consumpton n the Unted States n 2008 wth 1.84 pounds per person, tralng shrmp whch ha wth 4.10 pounds per person and canned tuna was next wth 2.80 pounds. Ths s a decrease from 2.36 pounds/person n 2007, but an ncrease from 1.58 pounds n Salmon s ranked frst among fnsh, wth 36.5 percent dollar share of supermarket fnfsh sales (Seafood Busness 2009). Most fresh or frozen Pacfc salmon sold n the U.S. s caught wld. Alaska, Washngton, Oregon, Calforna, and freshwater ntroductons of Chnook and Coho to Mchgan are the states where wld Pacfc salmon are caught. Alaska leads all states wth over 290,000 tonnes n 2008, down from 390,000 tonnes n 2007 (NMFS 2009). Washngton s second wth 7,000 tonnes, down from 11,800 tonnes n 2006.

7 Imports of fresh or frozen Pacfc salmon varetes have decreased snce the start of the study perod, from just over 16,000 tonnes n 1998 to 5,400 n Pacfc salmon landngs have fluctuated wldly. They decreased from 370,500 tonnes n 1998 to as low as 41,900 tonnes n 2004 before ncreasng agan to almost 299,000 n At the same tme, exports have been steadly ncreasng, gong from 60,800 n 1998 to 111,000 n The U.S. has mported a lmted and decreasng amount of wld Atlantc salmon n recent years, droppng from 566 tonnes n 1999 to 54 tonnes n 2008 (USITC 2009). Imports of Atlantc salmon have grown from 48,000 tonnes n 1998 to almost 83,000 tonnes n The trade defct n Atlantc salmon has grown from $462 mllon n 1998 to over $1.3 bllon n 2008 (NMFS 2009). Atlantc salmon s prmarly mported as farmed salmon from countres such as Norway and Chle. Overfshng has reduced ther numbers drastcally, and the U.S Fsheres and Wldlfe Servce has lsted them as endangered n many rvers n Mane snce 2000 (USFWS 2009). The Nexus between the Tarff Act of 1930 and COOL COOL requres supplers and retalers to ncur the costs for labelng, record-keepng and operatons. A 2003 USDA AMS report estmated these costs could be anywhere from $582 mllon to $3.9 bllon for a procedure that does not alter the composton of the actual product (Federal Regster 2003). Advocates clamed consumers would beneft from ths knowledge. Opponents argued the labelng was trade restrctng and desgned to mply foregn products nferorty to U.S. products, and that government oversght at the

8 retal level would be expensve (Becker 2001). They also ponted to possble hgher food prces through ncreased costs ncurred because of new labor, and the ncreased paperwork and materals needed to convey COOL nformaton to consumers. Secton 304 of the Tarff Act of 1930, as amended (19 U.S.C. 1304), generally provdes that every artcle of foregn orgn mported nto the Unted States shall be marked to ndcate to the ultmate purchaser n the Unted States the country of orgn of the artcle. Generally, the country of orgn of a good s the country n whch the good s wholly manufactured, produced or grown. Further work or materal added to an artcle n another country must effect a "substantal transformaton" to render such other country the country of orgn. Country of orgn means that the labels on the mported products must have the followng form "Product of Z, where Z s the name of the name of the country of orgn. Imported bulk products, such as carcasses, carcass parts, or large contaners of meat, fsh or poultry parts destned for U.S. plants for further processng also must bear country-of-orgn marks. The Tarff Act expressly states that "ultmate purchaser" must be aware of ts country of orgn. The U.S. Customs Servce admnsters and enforces the Tarff Act. They defne the "ultmate purchaser" as the last U.S. person who wll receve the artcle n the form n whch t was mported. For tems mported as retal-ready packages, the U.S. consumer s the ultmate purchaser. However, tems mported n bulk and destned for transformaton by a processor or manufacturer, wll be consdered ultmately purchased by the processor or manufacturer. As a result, the Tarff Act does not, n all cases, ensure that the fnal consumer s aware of the country of orgn.

9 Also, secton 304 of the Tarff Act requres that, f products are sold loosely at random weght from a contaner n a supermarket, ther "mmedate contaners" have country-oforgn labels. However, the loosely sold products themselves are not requred to be marked to ndcate ther orgn. Only f those products are wrapped n cellophane or otherwse packaged, s the label requred. The U.S Department of Agrculture, Agrculture Marketng Servce (AMS) admnsters COOL. COOL supplements the Tarff Act by provdng addtonal nformaton about country of orgn to the fnal consumer. It requres retalers to nform consumers of the country of orgn at the fnal pont of sale for farm-rased fsh and shellfsh; and wld fsh and shellfsh. Country of orgn labelng rules outlnes the requrements for labelng and recordkeepng for retalers and supplers. The rule prescrbes specfc crtera that must be met for a commodty to bear a "Unted States Country of Orgn" declaraton. The rule also contans provsons for labelng covered commodtes of foregn orgn. It provdes explct nformaton on what must be labeled, as well as the dstncton between exclusve U.S. orgn products and foregn products. It also provdes nformaton on the food servce establshments that are exemptons from the COOL requrements, as well as the types of processed food tems that are not covered by the legslaton. Products not covered under COOL are those that undergo some form of transformaton whch alters the character of the commodty so as to render the commodty dfferent from the orgnal materal used n the transformaton (U.S. Customs and Border Protecton 2008). Breadng, smokng, and curng are examples of transformaton done to commodtes that preclude them from beng consdered under COOL.

10 Data The data consst of U.S random weght purchases of salmon from , usng the Nelsen Homescan panel dataset. Salmon was dvded nto three mutually exclusve categores based on the type of preparaton and the method of purchase pre-cooked refrgerated, uncooked fresh or chlled, and uncooked frozen. These three preparatons were sold at four locatons wthn the store, a clerk-attended counter, a self-serve refrgerated cooler, and a self-serve frozen cooler. Fresh and frozen salmon can be sold as steaks, fllets or whole, whle pre-cooked salmon s often sold smoked or as lox/gravlax. Steaks are recommended to be no less than 2.5 ounces (0.16 pound), whle there are no specfcatons for fllet sze. Panel szes for the Nelsen data has ncreased from 1998 to 2006 by nearly 9,000 households partcpated. Data was avalable from 1998 to 2006, when Nelsen ceased to dfferentate random weght seafood purchases. The dataset ncluded 63,284 dfferent purchases of random weght salmon. To avod excessve mssng data and to obtan a unform tme seres, household purchases were aggregated weekly, obtanng a total quantty purchased for each week and an average unt weekly purchase prce for each category of salmon. Partal weeks 0 and 53 were dropped from the observatons, and COOL mplementaton was establshed week 15 of 2005, the frst full week after Aprl 4. The Nelsen data dd not contan country-of-orgn nformaton after Aprl 4, 2005, so a dummy varable took the value 1 durng week 15 of 2005 and after. Fgure 1 shows the

11 weekly share of expendture for precooked, uncooked fresh and uncooked frozen salmon from Table 1 shows the descrptve statstcs of the three salmon categores. Model The system estmated s condtonal on total salmon expendture. There s a two stage budgetng scenaro; U.S demand for salmon and U.S. demand for a varety of salmon products. In the frst scenaro, I mantan that U.S. consumers allocate total expendture among groups of goods, and that those preferences are blockwse or weakly separable (Barten 1977; Seale 1992). Havng allocated expendture on all goods, whch ncludes salmon, U.S. consumers further allocate salmon expendture among cooked, uncooked fresh and uncooked frozen salmon. As such, all three categores can be evaluated as a system. The nonlnear Almost Ideal Demand System (AIDS) model of Deaton and Muellbauer (1980) was employed to analyze demand changes n salmon after the mplementaton of COOL. The AIDS model gves the share equatons n a three good system as w t ln p ln( X / P) e, (1) j j j t where w s the share assocated wth salmon category, p s the prce of good, X s the total expendture on salmon,,, and are parameters, e s an error term, and P s the translog prce ndex defned by 1 ln P ln p ln p (2) 0 ln p j1 j j

12 Consstency wth utlty maxmzaton requres that the parameters satsfy the followng restrctons on the nonlnear AIDS model: 1; 0; j 0, ; (3) where homogenety s satsfed f and only f, for all j 0; j and symmetry s j satsfed f, and j. Homogenety and symmetry were mposed n the model. j j In ths analyss I tested for the effect of structural stablty snce the mplementaton of country of orgn labelng. Gven the above cross equaton restrctons, f structural change exst t wll lkely be a system-wde phenomenon, affectng all equatons smultaneously. Ths nvolved specfyng and estmatng an augmented equaton. Followng Moschn and Melke (1989) and (Klonars (2001) the augmented equaton s expressed as w c c)ln p ( c)ln( X / P) e, (4) t t ( j j j t j Agan, consstency wth utlty maxmzaton requres the addtonal parametrc restrctons of homogenety, addng up and symmetry: 0; j 0; 0 ;,. (5) j j The stablty tests that 0 and 0 are tests for no structural change. Because the COOL mplementaton perod s clearly defned, the tme path ct s approxmated by a vector whose elements are 0 pror to the mplementaton of COOL and 1 thereafter, thus allowng for the mplementaton of the Chow test for structural change. I argue that the effect of the legslaton may occur over an extended perod snce some retalers may choose to begn preparaton for, and adopton of, the law pror to t takng effect, whle

13 others wll not adopt the law untl after t takes full effect. Also, nformaton to consumers s not perfect and as the law takes effect t s expected that more and more consumers wll become aware of t and respond accordngly. Hence, the frst breakpont for the structural change process may take place pror to the law as well as t could take place well after the law was mplemented. I chose breakponts at 8 week ntervals, begnnng 24 weeks pror to the mplementaton of COOL and endng 24 weeks after ts mplementaton. Prelmnary tests of the data ndcated frst order autocorrelaton n the means and varances of uncooked fresh and uncooked frozen salmon. As a result, the fnal model s expressed as the frst dfference of the logs as: wt ct ( j jc) ln p j ( c) ln( X / P) et, where s the frst dfference operator. j Own-prce, cross-prce, and expendture elastctes, are calculated for each productspecfc demand followng Chalfant (1987). x j w j j ln p,, (6) w, j j where 1 f =j, =0 otherwse. (Own and cross-prce elastctes of demand) and,, j (6) 1, the expendture elastcty (7) w Emprcal Results and Dscusson

14 The parameter estmates from the teratve seemngly unrelated regresson AIDS model for salmon products are presented n table 2. Homogenety, symmetry and addng up restrctons consstent wth the theoretcal propertes of demand systems are mposed. Sngularty s avoded by droppng the uncooked frozen salmon equaton and recoverng t at the end from the addng up condtons. Prce-effect parameters relatng to precooked refrgerated salmon and uncooked fresh salmon are statstcally sgnfcant at the 1-percent level. Expendture effect parameters are not statstcally sgnfcant for precooked refrgerated salmon and uncooked fresh salmon. COOL had no statstcally sgnfcant effect on precooked and uncooked salmon consumpton. The Marshallan (uncompensated) and expendture elastctes at the varable means are presented n table 3. The prce-elastcty estmates are condtonal on expendtures for salmon products beng constant. Consstent wth demand theory, own-prce elastcty coeffcents are all negatve and statstcally sgnfcant. The own-prce elastctes for precooked salmon, uncooked fresh, and uncooked frozen are , , and , respectvely. Though they were all found to be nelastc, uncooked fresh whch could be consdered the hgher qualty product (Muhammad, Jones and Hahn 2007, Smth et al and Wheeler et al 1990) was found to be more prce senstve than precooked and uncooked frozen salmon.

15 The cross-prce elastctes express compettve relatonshps between and among products. The cross-prce elastctes between uncooked fresh salmon and the other 2 salmon products are negatve, suggestng complementarty. Complementarty relatonshps, though not normal and expected, have been found wthn and between meats (Yang and Koo, 1994; Wahl, Hayes, and Wllams, 1991 and Hayes, Wahl and Wllams, 1990). However, complementarty wthn product demand may occur when both products are jontly demanded to satsfy dfferent market segments (Hahn, et al. 1990). Ths may be the case for the salmon products where one product may be used to satsfy the fresh or chlled market whle the other s used to satsfy the processed market. Postve cross-prce elastctes between precooked and uncooked frozen suggest that they substtute for each other n the salmon complex. All expendture elastctes are postve and statstcally sgnfcant, suggestng normal goods. The expendture elastctes for precooked salmon, uncooked fresh and uncooked frozen salmon were 0.936, 0.997, and 1.079, respectvely. Interestngly, all the salmon products were found to show near untary response to expendture. Table 4 shows the results of the Chow tests for structural breaks. Chow tests were conducted at 8 week nterval 24 weeks pror to, and 24 weeks after COOL went nto effect. The results show that the Chow tests were statstcally nsgnfcant for all of the potental break ponts, suggestng that the events surroundng COOL dd not affect the consumer demand structure for salmon.

16 Summary and Conclusons A full nformaton maxmum lkelhood nonlnear AIDS 3-equaton model was specfed to estmate consumer demand for salmon and to ascertan f there are any sgn of structural nstablty snce country of orgn labelng was mplemented. Estmated parameters and coeffcents were consstent wth demand theory. Own prce elastctes suggest that hgher qualty uncooked fresh salmon was more senstve to prce changes than precooked or uncooked frozen salmon the perod of study. Expendture elastctes were postve and all statstcally sgnfcant, suggestng normal goods. Uncooked fresh salmon was found to be expendture elastc, whle precooked and uncooked frozen salmon were found to be expendture nelastc. The paper also evaluated the mpact of COOL on the consumpton of salmon. The fndngs suggest that COOL had no sgnfcant effect on precooked and uncooked consumpton. A comprehensve evaluaton of structural stablty for the system-wde model was done usng a seres of Chow tests to check for structural change n some or all of the parameters of a model 24 weeks pror to, and 24 weeks after, COOL suggests stable consumer demands. Ths mples that COOL has not sgnfcantly affected the way consumers purchase salmon products. Ths s consstent wth the fndngs of Jones, Somwaru, Whtaker (2009) who found no structural change n trade of fsh snce the mplementaton of COOL.

17 References Code of Federal Regulatons (2008). Ttle 19: Customs Dutes (J-Lst Exceptons), Accessed September 8, Deaton, A. S. and J. Muellbauer. An Almost Ideal Demand System. Amercan Economc Revew 70(1980a): Deaton, A. S. and J. Muellbauer. Economcs and Consumer Behavor. New York: Cambrdge Unversty Press, 1980b. (FAO) Food and Agrculture Organzaton (2007). The State of World Fsheres and Aquaculture, 2006, Accessed September 9, (FAO) Food and Agrculture Organzaton (2009), The State of World Fsheres and Aquaculture, 2008, Accessed September 9, Federal Regster (2003). Mandatory Country of Orgn Labelng of Beef, Lamb, Pork, Fsh, Pershable Agrcultural Commodtes, and Peanuts; Proposed Rule, Accessed September 8, Food and Water Watch (2007). Fshy Farms: The Problems wth Open Ocean Aquaculture, Accessed June 17, 2009.

18 Hahn, W.F., T. Crawford, L. Baley, and S. Shagham. The World Beef Market: government Interventon and Multlateral Polcy Reform. Staff Report. No. AGES- 9051, USDA/Economc Research Servce, Washngton DC, Hayes, D., T. Wahl, and G. Wllams. Testng Restrctons on Models of Japanese Meat Demand. Amercan Journal of Agrcultural Economcs. 72 (1990): Jones, K.G., A. Somwaru, and J. Whtaker. Country of Orgn Labelng: Evaluatng the Impacts of U.S. and World Markets Agrcultural and Resource Economcs Revew 38(2009):1-9. Klonars, S. Structural Change n Greek Meat Demand. Agrcultural Economcs Revew. 2(2001): Montagne, F. (2003). Everybody Loves Atlantc Salmon: Here s the Catch, Natonal Geographc Onlne, Accessed September 10, Monterey Bay Aquarum (2009). Seafood Watch Gude: Salmon, gd=17, Accessed September 9, Moschn, G and Melke, D. Modelng the Pattern of Structural Change n U.S. Meat Demand. Amercan Journal of Agrcultural Economcs. 71(1989): Muhammad, A. K.G. Jones and W.F. Hahn. The Impact of Domestc and Import Prces on U.S. Lamb Imports: A Producton System Approach. Agrcultural and Resource Economcs Revew 36(2007):

19 (NFI) Natonal Fsheres Insttute (2009). Top 10 Consumed Seafoods, Accessed September 16, (NOAA) Natonal Oceanc and Atmospherc Admnstraton (2009). Who s Eatng Seafood? Accessed September 8, (NMFS) Natonal Marne Fsheres Servces (2009). Personal Communcaton from the Natonal Marne Fsheres Servce, Fsheres Statstcs Dvson, Slver Sprng, MD. Seafood Busness (2009). Farmed East, Wld West, Vol. 28, No. 9, p. 16. Smth, G.C., C.W. Spaeth, Z.L. Carpenter, G.T. Kng, and K.E. Hoke The Effects of Freezng, Frozen Storage Condtons and Degree of Doneness on Lamb Palatablty Characterstcs. Journal of Food Scence 33(1): (USDA-AMS) U.S. Department of Agrculture Agrcultural Marketng Servce (2009), Examples of Records Useful for COOL Verfcaton Purposes Farm Rased Fsh, Accessed September 8, (USDA-AMS) U.S. Department of Agrculture Agrcultural Marketng Servce (2009), Examples of Records Useful for COOL Verfcaton Purposes Wld Fsh, Accessed September 8, 2009.

20 (USDA-NASS) U.S. Department of Agrculture Natonal Agrcultural Statstcs Servce (2007) Census of Aquaculture, Accessed September 7, (USFWS) U.S. Fsheres and Wldlfe Servce (2009). Speces Profle for Atlantc Salmon (Salmo Salar), Accessed September 15, (USITC) Unted States Internatonal Trade Commsson (2009). USITC Interactve Tarff and Trade DataWeb, Accessed September 8, Wahl, T., D. Hayes and G. Wllams. Dynamc Adjustments n the Japanese Lvestock Industry Under Beef Import Lberalzaton. Amercan Journal of Agrcultural Economcs. 73 (1991): Wheeler, T.L., R.K. Mller, J.W. Savell, and H.R. Cross Palatablty of Chlled and Frozen Beef Steaks, Journal of Food Scence 55(2): Womach, J., and Becker, G. (2001). Farm Economc Relef and Polcy Issues n the 106th Congress: A Retrospectve, Congressonal Research Servce Polcy Brefs, Accessed September 8, Yang, S. and W.W. Koo. Japanese Meat Import Demand Estmaton wth the Source Dfferentated AIDS Model. Journal of Agrcultural and Resource Economcs 19(1994):

21 Table 1. Descrptve Statstcs on U.S. Random Weght Consumpton of Salmon Varable Mean Std Dev Mnmum Maxmum Precooked Share(% expendture) Prce ($ per lb) Quantty (lbs) Uncooked Fresh Share(% expendture) Prce ($ per lb) Quantty (lbs) Uncooked Frozen Share(% expendture) Prce ($ per lb) Quantty (lbs)

22 Table 2. Parameter estmates from the nonlnear almost deal demand system salmon products Parameter a Parameter Standard Error t-value estmate Intercepts *** Prce effects *** *** *** *** *** ** Expendture effects COOL effects DW 1 = 1.81 DW 2 = 1.70 Parameter subscrpts denote: 1=Precooked; 2=Uncooked Fresh; 3=Uncooked Frozen **Sgnfcance level < 0.05 ***Sgnfcance level < 0.01

23 Table 3. Estmated Marshallan Prce and Income Elastctes for Salmon Precooked Uncooked Fresh Uncooked Frozen Expendture Elastcty Precooked (0.086)*** (-0.184)*** (0.103)*** (0.115)*** Uncooked Fresh (0.005)*** (0.019)*** (0.012)*** (0.009)** Uncooked Frozen (0.066)** (0.256)** (0.162)*** (0.1271)** a Asymptotc standard errors are n parentheses **Sgnfcance level = 0.05 ***Sgnfcance level = 0.01

24 Table 4. Chow test for Structural Change Break Pont Year Month Den DF F -Value Pr > F / / / / / / /

25 Fgure 1. Weekly Expendture Share of Uncooked Fresh Salmon Weekly expendture share of uncooked Frozen Salmon

26 Weekly Expendture Share of Pre-Cooked Refrgerated Salmon