Price flexibility for quota and non-quota species in the UK: a cointegration systems approach

Considerable research has been undertaken in the past on price formation of key species in the UK. However, little attention has been paid to the less significant species, which generally are non-quota species. For many small-scale fishers, non-quota species form the basis of their income. In this paper, the own and cross-price flexibilities for a range of species important to the English Channel fisheries are estimated. A number of groups of species including both quota and non-quota species were determined using cluster analysis. System of equation models were developed for each group using a cointegration systems approach. Long run equilibrium and short run price flexibilities were determined.