ABSTRACT
Currently, commercial salmon farming in the United States is legal only in the Puget Sound of Washington State and in Maine. Comparing different markets for salmon by species is interesting and informative when marketing decisions and policy analysis are of interest. There are three main markets for salmon: Japan, North America, and the EEC. Perhaps the most important finding of the modelling exercise was that high-valued Pacific salmon substituted for farmed Atlantic salmon in all markets but that in no markets did low-valued pacific salmon substitute for farmed Atlantic salmon. This chapter presents an econometric model of world trade in fresh/frozen wild and farmed (pen-reared) salmon. The econometric model is used to characterize the interrelationships between the demands for Pacific and Atlantic salmon in the major international markets, and is also used to analyze the profitability of Atlantic salmon farming. The model was estimated using the single-equation technique of Bayesian bootstrapped two-stage least squares.
