Market Delineation and Demand Structure
12 Pages Posted: 25 Mar 2020
Date Written: February 1997
This paper addresses the relationship between the cointegration approach to market delineation and the more traditional approach of analyzing the demand structure among different products in terms of degree of substitutability. Cointegration tests for market delineation and estimation of a dynamic system of demand equations are undertaken utilizing the same data set. The data set consists of three high‐quality seafood products in the European Union. The results are encouraging as the results from the two approaches are not only compatible, but are also complementary in the sense that they provide more information together than they do separately.
Keywords: cointegration, dynamic demand systems, error correction models, market delineation, D120, L110, Q130
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