| Abstract: |
Russia is experiencing deep structural changes in many areas. For the seafood
industry important developments are large increases in household incomes,
development of modern super- and hypermarket distribution channels, and
product innovations. In the seafood category consumers are adopting new
species and new product forms at a rapid rate. Herring is one of the species
that is experiencing these changes. The dominant product form has
traditionally been whole salted herring, typically sold at open markets.
Herring sold in the traditional unprocessed form has been a protein source for
poor people, consumed at home. But more processed and expensive product forms
that are distributed through modern distribution channels have increased their
market share during the data period. <p> We employ a panel data set on monthly
per capita demand for different herring products in six Russian regions, from
unprocessed to value added products, to test hypotheses on the structure of
herring consumption. We estimate dynamic panel data demand systems, with
region-specific estimates of price and income elasticities. The six regions in
the data set have large differences in average per capita income. Our
econometric estimates indicate significant structural regional differences in
per capita consumption of different products, also after controlling for
income differences. We find that whole herring is generally an inferior good,
whereas fillet herring products tend to be normal goods. This suggests that if
incomes continue to increase, consumption will shift further from unprocessed
to value added herring products. |