Finding Nemo: estimating import demand for live reef food fish

Abstract

Reef fish traded alive for table food are high value-to-volume products, with demand centred in Hong Kong and southern mainland China. Import demand functions for live reef food fish are estimated for Hong Kong, in aggregate and for individual fish species. Cross-price, income and population elasticities, and the impact of SARS and Chinese New Year on demand, are estimated. Results show that price has a smaller influence on import demand than expected. The most influential factor is Chinese New Year. The price of low and medium-value species exhibited a negative impact, whereas the price of very high-value species exhibited a positive impact, on demand. This suggests that high-value live reef species may be Veblen goods, where consumption increases as a direct function of its price, in this case due to associated prestige and status.