U.S. Shrimp Market Integration
Stavanger University College
Lori Snyder Bennear
Duke University - Nicholas School for the Environment
Duke University - Sanford School of Public Policy
Martin D. Smith
Duke University - Nicholas School for the Environment; Duke University - Department of Economics
November 1, 2011
Duke University Environmental Economics Working Paper No. EE-11-09
Recent supply shocks in the Gulf of Mexico - including hurricanes, the Deepwater Horizon oil spill, and the seasonal appearance of a large dead zone of low oxygen water (hypoxia) - have raised concerns about the economic viability of the U.S. shrimp fishery. The ability for U.S. shrimpers to mediate supply shocks through increased prices hinges on the degree of market integration, both among shrimp of different sizes classes and between U.S. wild caught shrimp and imported farmed shrimp. We use detailed data on shrimp prices by size class and import prices to conduct a co-integration analysis of market integration in the shrimp industry. We find significant evidence of market integration, suggesting that the law of one price holds for this industry. Hence, in the face of a supply shocks, prices do not rise and instead imports of foreign farmed fish increase.
Number of Pages in PDF File: 25
Keywords: seafood trade, market integration, environmental shocks
JEL Classification: Q22working papers series
Date posted: November 4, 2011
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