@article{Fullenbaum:233545,
      recid = {233545},
      author = {Fullenbaum, Richard F.},
      title = {A General Equilibrium Demand Model for Living Marine  Resources: An Application of General Equilibrium and Common  Property Resource Theory to the U.S. Seafood Sector},
      address = {1971-08},
      number = {1507-2016-130893},
      series = {File Manuscript},
      pages = {187},
      year = {1971},
      abstract = {The purpose of this study is to extend the traditional  model of common property resouce exploitation to a more  general equilibrium frame of reference, and to examine  policy implications in the light of the extended analysis.   The most pronounced modification consists of the  specification of cross partial price derivatives of demand  between the major species of seafood consumed in the United  States.    The estimation procedure integrates both time  series and cross-sectional results in deriving all relevant  price and income parameters.  The time series analysis  employs a technique originated by Powell (26), in which a  series of linear expenditure functions--based upon the  assumption of the existence of a continuously  differentiable additive utility function--is estimated.   Seafood is treated as a separate commodity in the budget  constraint, and an implicit test of the additivity  assumption in this context is devised.  The method of  estimation involves an iterative technique in which prior  restrictions on the system give maximuj likelihood  estimators and the same estimates as would be obtained  using two-stage least squares.  The major purpose of the  time series component is to provide a forecasting equation  for expenditures on all seafood commodities, which takes  into account anticipated budget contraints and expenditures  on all other commodities.  The major parameters that are  derived include b F - the expenditure A coefficient for all  seafood, and 1, is equal ;to the following: (1) 3y 5. where  X is the marginal utility of income, and y is income.  Another related purpose of the time series analysis is to  provide a control total for the sum of consumer  expenditures for individual species. The aggregate seafood  expenditure parameter b I" is 'distributed' across species  on the basis of cross sectional income coefficients for  individual species which are constrained such that their  sum is equal  to I;F. The major purpose of the  cross-sectional component of the study--in addition to the  estimation of individual species income coefficients--is to  select a set of twenty-eight independently estimated  reliable own and cross price derivatives, from which  sixty-four price derivatives are obtained (i.e., eight  species, 8x8=64 price derivatives). In order to derive A  these demand parameters, the time series parameter y is  utilized. The estimates follow directly from tenets of  utility maximization. This completes the demand as.pect of  the study. On the supply side, species are broken down  according to proximity to their universal constraints at  maximum sustainable yield. Those species which are at or  near MSY are classified as constrained species; those  *which are not close to MSY or for which artificial  techniques of cultivation have been. developed are  classified as unconstrained species. Forecasts of  consumption are made under the assumption of perfect  elasticity of supply for ail species. Then, as a result of  forecasting far enough into the future such that market  clea'rance• at MSY is a reasonable assumption for the  constrained species, quantity adjustments--equal to the  difference between quantity consumed under conditions of  perfect elasticity and quantity consumed at MSY--are  calculated. Given these quantity adjustments, relative  price changes -for the constrained species may be obtained.  The conclusion reached is that, within a general  equilibrium framework, the rate of price increase due to  the imposition of supply constraints is considerably  dampened. Furthermore, only slight modifications of the  market mechanism are needed in order to prevent excessive  entry of capital and labor into fisheries which are being  *exploited at maximum sustainable yield : In other words,  since the rate of entry of excessive inputs is tied to the  rate of change in relative prices, a policy such as a  quota, when evaluated within a .general equilibrium  framework, will yield .an input combination such that the  level of redundant capital and labor is negligible.},
      url = {http://ageconsearch.umn.edu/record/233545},
      doi = {https://doi.org/10.22004/ag.econ.233545},
}