Revista Electrónica:
Depósito Legal: ppi 201502ZU4665 / / ISSN electrónico: 2477-944X
Revista Impresa:
Depósito Legal: pp 199102ZU46 / ISSN 0798-2259
MARACAIBO, ESTADO ZULIA, VENEZUELA
Vol. XXX (3) 2020
UNIVERSIDAD DEL ZULIA
REVISTA CIENTÍFICA
FACULTAD DE CIENCIAS VETERINARIAS
DIVISIÓN DE INVESTIGACIÓN
126
The price elasticity of the demand / Orozco, S. y col.
ABSTRACT
The price elasticity of demand (PED) measures the variation
of the quantity demanded due to a price variation. A concept
closely related to PED is the Revenue Increase (RI) that measure
weather the demand is elastic or inelastic. The main goal of this
paper was to estimate PED and its impacts on the income and
demand of six shery products from Mexico, such as Salmon,
Tuna, Sardine, Shrimp and Prawn, Trout and Tilapia. The data
were obtained from the Foreign Agriculture Service of United
States Department of Agriculture (1,998-2,018 Period) through
the tables provided and published on the Internet (secondary
data). In this paper, the arc method was applied to calculate both
PED and RI of the selected shery products. All of these products
showed an elastic demand price in almost all years of the period
under study; while the RI presented no dened trend. There was
a signicant positive correlation between export reference price
of demand and income for Tuna and signicant negative for
Trout and Sardine. There was a signicant negative correlation
between exported volume and export reference price for Shrimp
and Prawn, Trout and Sardine and signicant positive for Tuna.
For Salmon and Tilapia, the associations were not signicant. It
was observed no clear eects of the PED on income; aspect that
violates the PED theory.
Key words: Economics; elasticity; price of demand; sea products;
revenue increase
RESUMEN
La elasticidad precio de la demanda (PED en inglés) mide la
variación de la cantidad demandada debido a la variación en
el precio. Un concepto íntimamente relacionado al PED es el
Aumento de los Ingresos (RI en inglés). El objetivo de este trabajo
fue estimar la PED y su impacto en los ingresos y la demanda
de seis productos pesqueros de México, como Salmón, Atún,
Sardina, Camarones y Gambas, Trucha y, Tilapia. Los datos se
obtuvieron del Servicio de Agricultura Exterior del Departamento
de Agricultura de Estados Unidos (período 1.998-2.018) a través
de las tablas proporcionadas y publicadas en Internet (datos
secundarios). En este trabajo se aplicó el método de arco para
calcular el PED y el RI de los productos seleccionados. Estos
seis productos mostraron un precio de demanda relativamente
elástico en la mayoría de los años, mientras que el RI mostró una
tendencia no denida. Se encontró una correlación positivamente
signicativa entre el precio de referencia de exportación de la
demanda y el ingreso para el Atún, y negativo signicativo para
la Trucha y la Sardina. Se determinó también una correlación
negativamente signicativa entre el volumen exportado y el
precio de referencia de exportación para Camarones y Gambas,
Truchas y Sardinas, y positivo signicativo para Atún. Para
Salmón y Tilapia, las asociaciones no fueron signicativas. No
se observaron efectos claros de la PED en los ingresos, aspecto
que viola la teoría PED.
Palabras clave: E c o n o m í a ; e l a s t i c i d a d ; p r e c i o d e l a d e m a n d a ;
productos del mar; incremento de ingresos
Recibido: 26/02/2020 Aceptado: 15/09/2020
THE PRICE ELASTICITY OF THE DEMAND AND REVENUE INCREASE
FOR SOME FISHERY PRODUCTS
LA ELASTICIDAD PRECIO DE LA DEMANDA Y EL CAMBIO ANUAL EN EL INGRESO PARA
ALGUNOS PRODUCTOS PESQUEROS
Sergio Orozco-Cirilo*
1
, Juan Manuel Vargas-Canales
1
, Sergio Ernesto Medina-Cuéllar
2
and Nicasio García-Melchor
1
1
Universidad de Guanajuato. Campus Celaya Salvatierra. División de Ciencias Sociales y Administrativas. Departamento de Estudios
Sociales. Sede Salvatierra, Guanajuato, México y
2
Universidad de Guanajuato. Campus Irapuato-Salamanca, Departamento de Arte y
Empresa. Carretera Salamanca-Valle de Santiago km 3.5+1.8, CP. 36885, Salamanca, Guanajuato, México.
* Autor para correspondencia: orozcosergio@ugto.mx
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Revista Cientíca, FVC-LUZ / Vol. XXX, N° 3, 126 - 133, 2020
INTRODUCTION
Mexico is currently the third largest merchandise trading partner
of United States of America (USA) with $ 611.5 billions (b) in
bidirectional trade in goods during 2,018. Exports of goods totaled
$ 265.0 b; imports of goods amounted to $ 346.5 b. The USA
trade decit with Mexico was $ 81.5 b in 2,018. Trade in services
with Mexico (exports and imports) amounted to an estimated $
59.4 b in 2,018. Service exports were $ 34.1 b; imports of services
were $ 25.3 b. The USA trade services surplus with Mexico was $
8.8 b in 2,018. Mexico was the second largest supplier of imports
of goods from the USA in 2,018.
The top import categories in 2,018 was found: vehicles ($ 93
b), electrical machinery ($ 64 b), machinery ($ 63 b), mineral fuels
($ 16 b), and optical and medical instruments ($ 15 b). Total USA
imports of agricultural products from Mexico amounted to $ 26 b
in 2,018, the largest supplier of agricultural imports of USA. Main
categories include: fresh vegetables ($ 5.9 b), other fresh fruits ($
5.8 b), wine and beer ($ 3.6 b), snack products ($ 2.2 b), and fruits
and processed vegetables ($ 1.7 b). US imports of services from
Mexico were an estimated $ 25.3 b in 2,018, 0.6% ($ 164 million
(m)) less than 2,017, but 59.3% higher than the levels reported
in 2,008.
The law of demand [8] establishes that the existing relationship
for a good and the quantity demanded is inverse, so the demand
curve is descending (or with a negative slope) and the variables
that have the most inuence on demand are: the price of the own
good, personal income, prices of related goods (substitutes or
complementary), tastes and preferences, season, among others.
In this sense, the elasticity of a price is usually expressed as a
negative number, which represents a positive percentage value.
It is from here that elasticity can be understood or dened as
the percentage variation of one variable x in relation to another
variable y. If the percentage variation of the dependent variable
y is greater than the independent variable x, the relationship is
said to be elastic, since the dependent variable y varies in greater
quantity than that of the variable x.
In contrast, if the percentage variation of the variable x is
greater than that of y, the relationship is inelastic. The inelasticity
or elasticity of one variable in relation to another reects, that
if it is inelastic, the change in percentage terms made by the
independent variable on the dependent is small, however if it
is elastic, the percentage variation of the independent variable
on the dependent it is notorious. Mathematically, elasticity can
be expressed as the proportional change from one variable to
another variable. The concept of elasticity can be used as long as
there is a cause and eect relationship. In this way, the elasticity
of the demand price is the proportional variation of the quantity
demanded before a proportional variation of the price [4].
Mexico is the 4
th
most important shing Country in America and
occupies the 17
th
place in world sheries production. Thanks to
Mexico having privileged climatic and territorial conditions, a wide
variety of crustacean, mollusk and sh can be found. The most
representative species for the amount of income they generate
in Mexico are: Tuna (Thunnus spp.), Mojarra (Mayaheros
urophthalmus) and Shrimp (Farfantepenaeus spp.). Tuna and
Shrimp shing occur in almost all States that have a sea coast.
The Mojarra is shed in practically all the national territory
because it can be grown in estuaries and in freshwater ponds.
Other important shery products are Sardine (Sardinops spp.),
Octopus (Octopus vulgaris), Lobster (Panulirus interruptus),
Yellown Tuna (T. albacares), Bass (Morone spp.), Red Snapper
(Lutjanus spp,) and Oyster (Crassostrea spp.), in addition to
forty other species with lower production. Fishing in rivers, lakes,
lagoons, dams and estuaries is smaller but of great value to some
regions of Mexico for their food and economic contribution. In
these internal bodies of water, sh or other aquatic organisms
such as Trout (Oncorhynchus spp.), Bass, Catsh (Ariopsis spp.),
Shrimp and Prawns (Litopenaeus spp.) are usually planted, which
are produced through aquaculture [6].
In relation to the aquaculture production in Mexico, it generated
a total of 404 thousand Tons (T) of sh and shellsh grown in
coastal marine areas, inland waters and ponds in the national
territory during 2,017, with a value of 17,813 million of Mexican
pesos (Mp), which allowed to reactivate and boost the economy
in rural communities of the national territory. Due to its impact
on marginalized areas and in many rural communities in Mexico,
aquaculture has been a determining factor in overcoming poverty,
which is demonstrable by the high impacts and achievements
that have been obtained. In addition, it was noted that in 2,013,
aquaculture production was 246 thousand T worth seven
thousand 568 Mp; However, with the impulse of incentives for
the development of this activity and the eorts of thousands of
producers throughout the Country, production increased 158
thousand T. Currently, the main aquaculture species in Mexico
are Shrimp (150 thousand 76 T); Tilapia Mojarra (149 thousand
54 T); Oyster (45 thousand 148 T), Carp (30 thousand 300 T) and
Trout (seven thousand T) [2].
The prupose of this research was to estimate the price elasticity
of the demand of shery products, and to determine the impact
on this increase in the income of several shery goods from
Mexico such as Salmon, Tuna, Sardine, shrimp, Prawn, Trout,
and Tilapia.
MATERIALS AND METHODS
It was selected six of the major export issues in the shery
exportation industry between USA and Mexico: Salmon, Tuna,
Sardine, shrimp, Prawn, Trout, and Tilapia. In order to characterize
this market, it was proposed to calculate the price elasticity of
the demand (PED) and revenue increase (RI) of Salmon, Tuna,
Sardine, Shrimp and Prawn, Trout and Tilapia. For this, it was
necessary to obtain the data of exports in dollars and volume in
metric Tons (MT) of these six shery products. These data were
128
The price elasticity of the demand / Orozco, S. y col.
gathered from Foreign Agriculture Service (FAS) data Tables for
1,998-2,018 period [3] published on Internet (scondary data).
Using this information, the elasticity matrix was created, which
is what will be applied in the study. This elasticity matrix is made
based on the reference export price in dollars for each MT and the
volume exported in MT.
It is indicated that exports expressed in m of dollars will be
considered as the general average price by which these shery
products were attained (since the price at which the shery
goods of export are sold and achieved, it is used to analyse
in quantitative terms how the market of a certain good adapts
or adjusts to variations in the price of the same accounted for
in m of dollars, besides that these prices vary according to a
change in the real exchange rate) and the record of T of export
will be equal to the average annual amount demanded of these
shery products. Based on this, the estimations were determined
according to the formula of the price elasticity of the demand of a
good. The price elasticity of demand can be estimated using the
Arc Method as follows [1, 9]
where: P
1
= Initial price, P
2
= Final price, Q
1
= Initial quantity and
Q
2
= Final quantity
It must be pointed out that for the use of these formulae it was
needed to know the amounts demanded at dierent prices, with
all the other factors at constant consumers [7]. Total income
(TI) can be dened as the unit price multiplied by the amount
demanded, since this is the amount of income received by any
seller in a product, who charges a unit price equal to P, multiplied
by the total of units sold, Q. (TI = P × Q). The revenue increase
(RI) can be calculated in both initial and nal state, utilizing the
equation of the total income formula as follow [10]
where: P
2
, P
1
Q
2
and Q
1
as above.
The data of exports and volume of the six shery products were
introduced in the Excel software for processing and analysing
and to estimate the price elasticity of the demand and revenue
increase. Pearson’s correlation coecients were calculated
between export reference price and total income and exported
volume utilizing years (yr) as the common variable. They were
calculated for all six Mexican shery products when demand was
elastic and inelastic. The signicance of Pearson´s correlation
coecients was determined at 0.01 or 0.05 level of probability
using the Statistical Package for Social Science (SPSS) version
25.0 [5].
RESULTS AND DISCUSSION
In this Section it was showed the principal results, and presented
the discussion in the frame of the arc method used to calculate
the PED and RI values, for all six shery products exported to
USA from Mexico during the period from 1,998 to 2,018. To guide
the discussion, the results were presented separately, as follows.
Salmon:
The price elasticity of demand of Salmon oscillated from 0.63 (yr
2,007) and 22.29 (yr 2,009), the demand shows almost an elastic
behaviour in 13 yr (PED>1), with an inelastic behaviour only in 1
yr (PED < 1). Also, the PED=1 in 4 yr, as shown in
As can be seen from TABLE I, the value of the revenue
increase was negative in 10 yr and positive in other 10 yr. The
highest RI was observed in 2,008 (1,175.57%) with the lowest
values in 2,011 and 2,014 (-100.00%). The highest exported
quantity was reached in 1,999 (419.0 MT) and the lowest in
quantity in 2,007 (0.8 MT). With respect to the export referential
price, it can be said that reaches the highest value in the 2,018
(17,916.2 US dollar, US$/MT) and the lowest in 1,999 (2,545.1
US$/MT). The reference price showed no clear trend. It was also
noted that there were no exportations in 2,011 and during the
period from 2,014 to 2,016 but continued in 2,017 and 2,018. In
2,018, Salmon products showed an elastic demand of 1.22, with
a variation of 1% with respect to the export reference price. This
fact has aected the demand in Salmon volume in just 1.22%.
Shrimp and Prawn: The results for this item were shown in
TABLE II. Shrimp and Prawn has presented a changing demand,
since varied from 0.37 in 2,001 to 10.37 in 2,011. There were 14
elastic demands and six inelastic demands. This indicates that
the PED was elastics. With respect to the revenue increase, it
was negative in 9 yr and positive in 11 yr. The highest value of the
RI was 27.81% in 2,011 and the lowest -31.47% in 2,010 (TABLE
II).
As can be noted, the exported volume was highest in 2,009 with
41,121.8 MT (the other case when exported volume overcame
40,000 MT was in 2,007 with 40,559.2 MT), with the lowest value
occurring in 2,013, with just 18,486.6 MT (the only case when
the exported volume was lower than 20,000 MT). In the case of
the export reference price, this was highest during 2,014, with
14,893.5 US$/MT, and lowest during 2,009, with 8,082.1 US$/MT.
As in the case of Salmon, the export reference price showed no
129
Revista Cientíca, FVC-LUZ / Vol. XXX, N° 3, 126 - 133, 2020
clear trend through this yr. For Shrimp and Prawn, in 2,018, PED
was elastic with a value of 3.48, this is, the variation of 1% in the
export reference price, originate a variation of 3.48% in Shrimp
and Prawn demanded volumes.
Tuna: These results were displayed in TABLE III. As can be
seen, the PED for Tuna was inelastic during 7 yr and elastic in
13 yr. The highest PED was obtained in 2,012 with a value of
33.79, and a lowest value of 0.09, 2,018. In the case of the RI,
this displays negative values in a 10 yr period, with a lowest of
-58.27% in 2,018; and other 10 yr positive-values period, with
maximum of 359.44% in 2,016. As can be noticed, the export
reference price reached a highest value in 2,018 of about 6,076.5
US$/MT, and lowest in 1,999 with a value of about 2,125.0 US$/
MT. Exported volume was highest in 2,017 (8,586.2 MT) and
lowest in yr 2,001 (1,316.4 MT), with an exported volume lower
than 2,000 MT in 2,000 (1,662.2 MT). It is also observed from
TABLE III, that Tuna exports in 2,018 were characterized by an
TABLE I
PRICE ELASTICITY OF THE DEMAND, REVENUE INCREASE AND OTHER ECONOMIC VARIABLES OF SALMON
Years 1999-2000
Variable * 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
ERP(US$/
MT)
2,545.1 2,639.6 4,059.0 8,292.2 6,241.2 6,703.5 7,781.2 5,730.0 9,568.4 3,139.6
EV (MT) 419.0 249.4 66.1 1.2 3.4 22.3 14.6 1.1 0.8 31.1
PED 3.50
13.92 2.74 2.81 3.39 20.59 2.80 5.66 0.63 1.88
RI (%) 187.87
-38.27 -59.24 -96.29 113.25 604.47 -24.00 -94.45 21.45 1,175.57
Years 2009-2018
Variable * 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
ERP(US$/
MT)
3,011.7 11,017.2 5,067.6 3,036.6 7,934.2 17,916.2
EV (MT) 11.4 1.0 32.8 12.8 11.7 32.5
PED 22.29
1.47 1.00 1.00 1.75 1.00 1.00 1.22
RI (%) -64.84
-67.91 -100.00 -76.62 -100.00 527.25
* ERP: Export reference price; EV: Exported volume; PED: Price elasticity of the demand and RI: Revenue increase. ERP and EV are
from FAS [6].
TABLE II
PRICE ELASTICITY OF THE DEMAND, REVENUE INCREASE AND OTHER ECONOMIC VARIABLES OF SHRIMP AND PRAWN
Years 1999-2000
Variable * 1999
2000 2001 2002 2003 2004 2005 2006 2007 2008
ERP(US$/
MT)
11,018.8 13,860.3 12,689.6 10,869.1 11,535.4 11,294.5 11,395.0 9,097.7 8,839.3 9,865.1
EV (MT) 35,056.9 29,063.3 30,022.5 24,295.4 25,494.9 29,001.6 28,080.4 35,377.9 40,559.2 34,494.5
PED 0.51 0.82 0.37 1.36 0.81 6.10 3.64 1.03 4.74 1.47
RI (%) 1.03 4.28 -5.42 -30.69 11.37 11.38 -2.31 0.59 11.39 -5.08
Years 2009-2018
Variable * 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
ERP(US$/
MT)
8,082.1 9,676.7 9,428.3 9,742.5 14,279.1 14,893.5 11,444.1 11,640.8 11,813.1 11,357.3
EV (MT) 41,121.8 23,536.2 30,873.0 26,292.0 18,486.6 20,356.5 27,995.4 25,324.4 28,539.3 24,884.2
PED 0.88
3.03 10.37 4.89 0.92 2.29 1.21 5.88 8.12 3.48
RI (%) -2.33
-31.47 27.81 -12.00 3.05 14.85 5.67 -7.99 14.36 -16.17
* ERP: Export reference price; EV: Exported volume; PED: Price elasticity of the demand and RI: Revenue increase. ERP and EV are
from FAS [6].
130
The price elasticity of the demand / Orozco, S. y col.
inelastic PED value of about 0.10.
This means that a variation of 1% in the reference price, can
only aect the demanded volume by 0.10%.
Trout. The price elasticity of demand of Trout exports show
variations in the range 0.06- 27.47, with a 5 yr inelastic period,
and a 15 yr elastic period, as can be noted from TABLE IV. The
RI values showed an increase from negative values in an 11 yr
period (with lowest value of about -89.51% in 2,018), to positive
values within a term of 9 yr (with a maximum of 237.38%), as can
be seen in TABLE IV. The highest exported quantity of Trout was
reached in 2,007, with an amount of the order of 120.3 MT, with a
minimum in 2,018 of about 5.9 MT.
Regarding the export reference price, 2,014 appears to be a
critical yr in which, reference prices were subjected to variations
from a maximum of 6,656.7 US$/MT to a minimum of 2,762.5
US$/MT. It was observed that in 2,018, the Trout exports had a
PED of 3.22%, this is, a variation of 1% in export reference prices
of Trout exports during this yr, caused a variation of 3.22% in the
amount of Trout demanded.
TABLE III
PRICE ELASTICITY OF THE DEMAND, REVENUE INCREASE AND OTHER ECONOMIC VARIABLES OF TUNA
Years 1999-2000
Variable * 1999 2001 2002 2003 2004 2005 2006 2007 2008
ERP(US$/MT) 2,125.6 3,813.6 3,518.1 4,754.8 5,336.7 4,779.0 3,427.7 3,853.9 3,336.9
EV (MT) 4,430.2 1,316.4 2,950.4 3,296.4 3,968.7 5,241.7 4,574.4 4,624.9 4,185.3
PED 2.37
29.05 9.50 0.37 1.60 2.51 0.41 0.09 0.69
RI (%) 33.68
-21.43 106.76 51.00 35.13 18.27 -37.41 13.68 -21.64
Years 2009-2018
Variable *
2009 2011 2012 2013 2014 2015 2016 2017 2018
ERP(US$/MT) 2,916.4 3,939.2 3,899.8 5,371.5 5,041.6 4,818.2 5,008.2 5,057.6 6,076.5
EV (MT) 4,494.8 4,213.5 5,937.5 4,956.2 7,387.3 6,453.8 7,807.2 8,586.2 8,434.1
PED 0.53
3.61 33.79 0.57 6.22 2.98 4.91 9.68 0.10
RI (%) -6.14
32.77 39.51 14.97 39.90 -16.51 25.74 11.06 18.02
* ERP: Export reference price; EV: Exported volume; PED: Price elasticity of the demand and RI: Revenue increase. ERP and EV are
from [6].
TABLE IV
PRICE ELASTICITY OF THE DEMAND, REVENUE INCREASE AND OTHER ECONOMIC VARIABLES OF TROUT
Years 1999-2000
Variable * 1999 2001 2002 2003 2004 2005 2006 2007 2008
ERP(US$/MT) 3,687.6 3,944.7 3,559.8 3,142.6 2,762.5 3,089.0 3,145.4 3,368.7 3,514.2
EV (MT) 96.6 74.2 64.4 80.0 86.9 36.7 56.5 120.3 37.3
PED 1.65
27.47 1.38 1.74 0.64 7.28 23.48 10.53 24.91
RI (%) 12.05
-36.71 -21.68 9.66 -4.51 -52.78 56.76 128.04 -67.65
Years 2009-2018
Variable * 2009 2011 2012 2013 2014 2015 2016 2017 2018
ERP(US$/MT) 4,896.6 4,172.9 6,217.3 5,183.5 6,656.7 4,650.7 5,817.7 4,238.5 5,150.5
EV (MT) 51.0 36.5 46.9 5.9 15.5 36.6 26.4 30.4 15.9
PED 0.94
3.74 0.63 8.56 3.61 2.28 1.45 0.45 3.22
RI (%) 90.52
-21.00 91.44 -89.51 237.38 64.97 -9.77 -16.11 -36.44
* ERP: Export reference price; EV: Exported volume; PED: Price elasticity of the demand and RI: Revenue increase. ERP and EV are
from FAS [6].
131
Revista Cientíca, FVC-LUZ / Vol. XXX, N° 3, 126 - 133, 2020
Tilapia: The results for Tilapia were shown in TABLE V. It
was seen that the demand for this product displays an inelastic
demand in the period 2,012-2,018, where the value of the PED
decreases from 13.50 in 2,012 to 0.08 in 2,018. It was observed
that four isolated yr PED=1, so the price elasticity showed no
regular trend. It was noticed an important increase of the RI,
from -100% up to 70,597.3% in the period from 2,000 to 2,008.
The PED could be estimated within the periods 2,001-2,004, and
2,009-2,010 because there were no exportations of Tilapia during
these periods. The same applies to the RI in the periods 2,001-
2,005, and 2,009-2,011.
The relation exported volume increases from 0.4 MT in 2,006
up to 4,241.3 MT in 2,016. The export reference price also
increases from 2,339.14 US$/MT in 2,000 up to 7,737.97 US$/
MT. The variation of the amount of Tilapia demanded with respect
to the PED was similar to that of Tuna.
Sardine: As it was seen from TABLE VI, the price elasticity of
demand displays an elastic behavior during 15 yr and inelastic
in 5 yr, with lowest value of o.25 in 2,003, and highest value of
70.41 in 2,010. On the other hand, the RI varies from negative to
positive, with lowest value of -58.27% in 2,015, and 359.44% in
2,016.
TABLE V
PRICE ELASTICITY OF THE DEMAND, REVENUE INCREASE AND OTHER ECONOMIC VARIABLES
Years 1999-2000
Variable * 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
ERP(US$/MT)
2,339.1 5,760.7 4,305.8 7,362.9
EV (MT)
7.3 0.4 11.5 2.0
PED 1.62 1.00 1.00 6.45 2.69 1.00
RI (%) 147.63 -100.00 2,048.90 -70.26 -100.00
Years 2009-2018
Variable * 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
ERP(US$/MT)
3,538.7 3,092.7 7,738.0 7,132.7 7,606.0 6,179.3 6,572.7 5,342.0
EV (MT)
118.0 5.7 1,610.6 4,057.3 4,241.3 3,308.7 2,952.9 2,903.9
PED
1.00 13.50 2.32 10.61 0.69 1.19 1.84 0.08
RI (%)
-95.78 70,597.33 132.21 11.47 -36.62 -5.07 -20.07
* ERP: Export reference price; EV: Exported volume; PED: Price elasticity of the demand and RI: Revenue increase. ERP and EV are
from FAS [6].
TABLE VI
PRICE ELASTICITY OF THE DEMAND, REVENUE INCREASE AND OTHER ECONOMIC VARIABLES OF SARDINE
Years 1999-2000
Variable * 1999 2001 2002 2003 2004 2005 2006 2007 2008
ERP(US$/MT) 943.4 703.2 813.9 1,010.7 950.3 965.3 988.9 1,130.1 1,048.3
EV (MT) 3,960.5 5,105.6 4,113.9 3,901.2 3,760.0 2,727.1 3,987.2 3,015.7 3,518.1
PED 1.49
0.94 1.47 0.25 0.60 20.39 15.53 2.08 2.05
RI (%) -3.04
3.23 -6.74 17.75 -9.37 -26.33 49.78 -13.57 8.22
Years 2009-2018
Variable *
2009 2011 2012 2013 2014 2015 2016 2017 2018
ERP(US$/MT) 790.1 671.2 915.9 1,054.7 1,073.6 1,413.1 733.3 679.6 519.5
EV (MT) 5,759.6 2,104.0 1,556.6 973.1 1,094.1 346.9 3,071.3 4,411.5
PED 1.72 1.14 0.97 3.27 6.61 3.80 2.52 4.71 3.75
RI (%) 23.39
-27.75 0.95 -28.01 14.44 -58.27 359.44 33.12 129.83
* ERP: Export reference price; EV: Exported volume; PED: Price elasticity of the demand and RI: Revenue increase. ERP and EV are
from FAS [6].
132
The price elasticity of the demand / Orozco, S. y col.
The export reference price of Sardine increased from 433.97
US$/MT in 2,001 up to 1,413.14 US$/MT, with exportation
volumes varying from 346.97 MT to 13,263.0 MT.
A variation of 1% on the export reference price induces a
variation of 3.75% on quantity demand.
Pearson´s correlation coecients
The Pearson´s correlation coecients of all six shery products
were shown in TABLE VII and VIII. In TABLE VII it was reported
the results for yr in which the PED was elastic. There was no
signicant relationship (P>0.10) between the exported volume
and reference price for Salmon and Tilapia, However, for Tuna
this relationship was positively signicant (P>0.10), with a directly
proportional relation between the two parameters. On the other
hand, for shrimp, Prawn, Trout, and Sardine, this relationship was
negatively signicant (P ≤ 0.01, P ≤ 0.01, P ≤ 0.05, and P ≤ 0.01,
respectively). This means that exported volume and reference
price were inversely proportional.
According to the law of demand of Microeconomics [7], if the
goods price increase then the quantity exported decrease. In
contrast, for Tuna and Tilapia, this law was not accomplished
because the relation was directly proportional: as price of a good
increase, the quantity demanded of the good also increases; and
as the price of a good decrease, the quantity demanded decreases.
In short, a higher price typically causes reduced consumption of
the good in question, but it can aect the consumption of other
goods as well.
shows the Pearson´s correlation coecients between exported
volume and export reference price, for yr in which the PED was
inelastic.
It can be noted that the relationship was not signicant (P >
0.10) between both the exported volume and reference price,
for shrimp, Prawn, Trout, and Sardine. However, for Tuna this
relationship was positively signicant (P ≤ 0.10). These indicate
that, in the case of Tuna, exported volume and reference price
were directly proportional, as in the case of an elastic PED. In
shrimp, Prawn, Trout, and Sardine, the relation exported volume/
reference price has no dened trend. Due to the lack of data
for Salmon and Tilapia, correlation coecients could not be
estimated. These results are indicative that when the PED is
inelastic, the product departs from the demand law.
CONCLUSIONS
In this work it was presented a report on the state of the
exports regarding shery commerce between USA and Mexico
in between the period 1,998-2,018. For this study it was selected
six of the main shery products: Salmon, Tuna, Trout, shrimp,
Prawn, Tilapia, and Sardine. For this study it was employed
the arc method to characterize both the price elasticity demand
(PED), and the revenue income.
All selected products showed an elastic demand price in
almost all yr in the period under study, with short periods of
TABLE VII
PEARSON´S CORRELATION COEFFICIENTS (P) BETWEEN EXPORT REFERENCE
PRICE (ERP) WITH EXPORTED VOLUME (EV) AND INCOME (I)
Salmon Shrimp& Prawn Tuna Trout Tilapia Sardine
Salmon -0.369 & -0.032*
Shrimp&
Prawn
-0.690††† & 0.030
Tuna
0.538† &
0.745†††
Trout
-0.607†† &
-0.447†
Tilapia 0.581 & 0.604
Sardine
-0.655††† &
-0.519††
††† Highly signicant (P ≤ 0.01).
†† Signicant (P ≤ 0.05).
† Signicant (P ≤ 0.10).
r´s without †††, †† and † are not signicant (P > 0.10).
* First r´s are between ERP and EV and second r´s are between ERP and income.
Number of observations were 13, 14, 13, 15, 8 and 15 for Salmon, Shrimp and Prawn, Tuna, Trout, Tilapia and Sardine, respectively).
Income was calculated as: I = ERP × EV
133
Revista Cientíca, FVC-LUZ / Vol. XXX, N° 3, 126 - 133, 2020
inelastic demand. This was in contrast to the revenue increase,
which behavior presented no dene trend. In periods when the
PED was elastic, the relation export volume/export reference
price was inversely proportional for shrimp, Prawn, Trout, and
Sardine, in agreement with the law of demand. In the case of
Tuna and Tilapia, this relation was directly proportional. This may
be an indicative of distortions in the market of these products in
periods of elastic PED. For periods of inelastic PED, almost all
markets depart from the law of demand, or there was no a dened
relationship; aspect that violates the PED theory.
Since USA/Mexico is one of the most important commercial
partnerships in North America, the results of this work appear to
be a very useful tool to predict future trends in shery exportations
between these two Countries.
ACKNOWLEDGEMENT
The authors thank the University of Guanajuato for promoting
scientic research as a strategic pillar to strengthen teaching.
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TABLE VIII
PEARSON´S CORRELATION COEFFICIENTS (P) BETWEEN EXPORT REFERENCE
PRICE (ERP) WITH EXPORTED VOLUME (EV) AND INCOME (I)
Salmon Shrimp& Prawn Tuna Trout Tilapia Sardine
Salmon NE
Shrimp&
Prawn
-0.846† &
-0.032 *
Tuna 0.634 & 0.846†
Trout -0.589 & 0,446
Tilapia NE
Sardine -0.861† & -0.139
† Signicant (P ≤ 0.10). r´s without † are not signicant (P > 0.10).
* First r´s are between ERP and EV and second r´s are between ERP and income. NE: No estimated
Number of observations were 1, 6, 7, 5, 2 and 5 for Salmon, Shrimp and Prawn, Tuna, Trout, Tilapia and Sardine, respectively) when
elasticity was inelastic. Income was calculated as: I = ERP × EV
Vol, XXX, N
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3
Esta revista fue editada en formato digital y publicada en
Diciembre 2020, por La Facultad de Ciencias Veterinarias,
Universidad del Zulia. Maracaibo-Venezuela.
www.luz.edu.ve
www.serbi.luz.edu.ve
produccioncientica.luz.edu.ve
