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Abstract

A simple excess supply-demand model is used to determine the effects of income and population growth on the international price of fish, and on welfare in net exporting and importing regions of the world. Stochastic simulations of the model suggest fish price increases by between 0.25% and 1.07% for each 1% increase in world income, and by between 0.30% and 1.20% for each 1% increase in world population. Combining these elasticity estimates with the actual growth in income and population for 1999-2013, results suggests income and population growth together caused the world price of fish to rise by between 1.0% and 4.1% per year, for a best-bet estimate of 2.1% per year. The actual average annual rise in fish price over the last 12 years was 0.9%. This suggests supply growth due to aquaculture moderated to a significant extent price pressure due to demand growth. Higher fish prices increase welfare in net exporting countries at the expense of welfare in net importing countries. However, our results suggest net gains to producers and consumers in the two regions combined are positive.

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