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AN ECONOMETRIC ANALYSIS OF SOCIOECONOMIC AND

DEMOGRAPHIC DETERMINANTS OF FISH AND SHELLFISH

CONSUMPTION IN THE UNITED STATES



BY

JONATHAN S. PERRY



A DISSERTATION PRESENTED TO THE GRADUATE COUNCIL

OF THE UNIVERSITY OF FLORIDA IN

PARTIAL FULFILLMENT OF THE REQUIREMENTS

FOR THE DEGREE OF DOCTOR OF PHILOSOPHY



UNIVERSITY OF FLORIDA
1981



To my mother and father — who taught me the important things,



ACKNOWLEDGMENTS

The author expresses sincere appreciation to Dr. F.J. Prochaska,
Dr. J.C. Cato, and Dr. J. A. Koburger for taking time from their sched-
ules to serve on his Advisory Committee. Their comments, criticisms,
and suggestions upon reviewing the drafts of this manuscript served to
make it a more scholarly work and were appreciated. A special note of
thanks is due F.J. Prochaska, Chairman of the Advisory Committee, for
his suggestions and guidance throughout the course of the authors
graduate career.

A special note of gratitude must be extended to Ramona Rochester,
Renelle Phillips, and Shirley Harris, for typing the numerous drafts
of this dissertation. A debt is also owed Carolyn Almeter and Debbie
Miller for their aid with the computational aspects of this work.
Appreciation must also be expressed to Dr. Leo Polopolus, Department
Chairman, and Dr. F.J. Prochaska, for their aid with financial support
throughout the author's graduate study.

Finally, the author is indebted to his family and wife for their
support, understanding, and cooperation throughout the course of his
graduate work.



m



TABLE OF CONTENTS



Page
i i i
vi
ix



ACKNOWLEDGMENTS

LIST OF TABLES

ABSTRACT

CHAPTER

I INTRODUCTION 1

Problem Statement 5

Objectives 6

II PREVIOUS WORK RELATING SOCIOECONOMIC AND DEMOGRAPHIC

FACTORS TO FISH AND SHELLFISH CONSUMPTION 8

Demand Analysis of Fish and Shellfish Products. . . 8

Consumption Studies of Fish and Shellfish Products. 11

Focus of the Present Research 20

III THEORETICAL FRAMEWORK 21

The Level of Aggregation 26

. The General Expenditure Income Relationship .... 27

Modification of the General Engle Curve Model ... 27

The Modified Expenditure Income Model 29

IV EMPIRICAL CONSIDERATIONS 33

Functional Form 33

The Data 35

The Tobit Model 40

The Independent Variables 48

The Empirical Model 57

The Fully Specified General Model 58

Food Stamps 59

Statistical Considerations 59



IV



CHAPTER



Page



V EMPIRICAL RESULTS—REGIONAL MODELS

Introduction

Southern Regional Model Results

Northeastern Regional Model Results

Western Regional Model Results

North Central Regional Model Results

VI EMPIRICAL RESULTS— INCOME-GROUP MODELS

Introduction

Southern Income-Group Model Results

Northeastern Income-Group Model Results

Western Income-Group Model Results

North Central Income-Group Model Results

VII EMPIRICAL RESULTS-AVERAGE WEEKLY EXPENDITURES AND FOOD
STAMP MODELS

Introduction

Tabular Analysis of Weekly Expenditures

Effect of Food Stamps on Household Expenditures . .

Average Weekly Expenditures of Households Receiving

Food Stamps by Race

VIII SUMMARY AND IMPLICATIONS FOR FURTHER RESEARCH

Summary

Implications for Further Research

APPENDIX

REFERENCES

BIOGRAPHICAL SKETCH



62

62

63
74
81



96

96

96

108

118

129



140

140
140
152

159

160

160
167

171

173

176



LIST OF TABLES



Table



5



Page



1 Number of observations in BLS CEDS data by survey year. . 39

2 Number of households in regional and income groups after

BLS data was stratified by income and region 56

3 Income variable coefficient's sign and significance ... 64

4 Southern regional model coefficients and standard errors. 65



Away-from-home expenditure variable coefficient's sign

and significance 66



6 Race variable coefficient's sign and significance .... 67

7 Urbanization variable coefficient's sign and significance 68

8 Occupation variable coefficient's sign and significance . 69

9 Education variable coefficient's sign and significance. . 69

10 Adult male variable coefficient's sign and significance . 70

11 Adult female variable coefficient's sign and significance 71

12 Infant variable coefficient's sign and significance ... 72

13 Elderly male variable coefficient's sign and significance 73

14 Elderly female variable coefficient's sign and signifi-
cance 74

15 Regional expenditure income elasticity of demand values . 76

16 Northeastern regional model coefficients and standard

errors 77

17 Western regional model coefficients and standard errors . 82

18 North Central regional model coefficients and standard

errors 89

19 Southern income group coefficients - sign and significance 97



VI



Tab1e Page

20 Southern total expenditure income group coefficients and
standard errors 99

21 Southern shellfish expenditure income group coefficients

and standard errors 100

22 Southern filleted and steaked expenditure income group
coefficients and standard errors 102

23 Southern whole fish expenditure income group coefficients

and standard errors 103

24 Southern canned fish expenditure income group coeffi-
cients and standard errors 104

25 Northeastern income group coefficients - sign and
significance 109

26 Northeastern total expenditure income group coefficients

and standard errors HI

27 Northeastern whole fish expenditure income group co-
efficients and standard errors 112

28 Northeastern shellfish expenditure income group co-
efficients and standard errors 114

29 Northeastern canned fish expenditures income group co-
efficients and standard errors 115

30 Northeast filleted and steaked expenditure income group
coefficients and standard errors 117

31 Western income group coefficients — sign and significance 119

32 Western total expenditure income group coefficients and
standard errors 120

33 Western filleted and steaked expenditure coefficients

and standard errors 122

34 Western canned fish expenditure income group coeffi-
cients and standard errors 124

35 Western shellfish expenditure income group coefficients

and standard errors 125

36 Western whole fish expenditure income group coefficients

and standard errors 126

37 North Central income group coeff icients - sign and signif-
icance 130



VI 1



Table

38



Page

North Central total expenditure income group coefficients

and standard errors 13]



39 North Central whole fish expenditure income group co-
efficients and standard errors 133

40 North Central filleted and steaked expenditure income

group coefficients and standard errors 134

41 North Central canned fish expenditure income group co-
efficients and standard errors 137

42 North Central shellfish expenditure income group co-
efficients and standard errors 139

43 Average weekly expenditures and income by region .... 141

44 Average weekly expenditures and income by region and
urbanization 142

45 Average weekly expenditures and income by race 144

46 Average weekly expenditures and income by region and

race 145

47 Average weekly expenditures and income by income groups. 147

48 Average weekly expenditure and income by region and in-
come group 149

49 Average weekly expenditures and income by occupation of
household head 150

50 Average weekly expenditures and income by region and
occupation of household head 151

51 Average weekly expenditures and income by education

level of household head 153

52 Food stamp model coefficients standard errors and
elasticities 155

53 Food stamp model coefficient - sign and significance. . . 156

54 Average weekly expenditures and income of food stamp
recipients by race 159



Abstract of Dissertation Presented to the Graduate Council
of the University of Florida in Partial Fulfillment of the Requirements
for the Degree of Doctor of Philosophy

AN ECONOMETRIC ANALYSIS OF SOCIOECONOMIC AND DEMOGRAPHIC
DETERMINANTS OF FISH AND SHELLFISH CONSUMPTION IN THE UNITED STATES

By

Jonathan S. Perry

August 1981



Chairman: Frederick J. Prochaska

Major Department: Food and Resource Economics

Weekly household expenditures on fish and shellfish products in
the United States were analyzed through estimation of an Engel curve
relationship. Expenditures on five product groups (canned fish, shell-
fish, whole fish, filleted and steaked fish, and total expenditures)
were expressed as a function of thirteen variables reflecting household
socioeconomic and demographic characteristics. Variables included were
income, race, expenditures on food away-from-home, education, occupation,
urbanization and an adult equivalent scale.

Data employed were collected by the Bureau of Labor Statistics
during the 1972-1974 Consumer Expenditure Diary Survey. The 23,186
households studied were segregated into four regions and three income
groups. A separate equation for each expenditure category was estimated
for each region and each income group. Expenditures were considered
limited dependent variables and Tobit analysis used. The solution algo-
rithm chosen was Phelps' version of LIMDEP.



IX



Income, race, and the adult equivalent scale were consistently
significant in explaining expenditures on all product groups. Income
had a significant positive impact on all expenditure categories except
whole fish. The Northeast tended to have the largest income coefficients,
expenditure income elasticities of demand, and average weekly expenditures.
Smallest elasticities occurred in the South while the North Central
states had the smallest average expenditures. Among product groups the
largest elasticities were associated with shellfish and the smallest
with filleted and steaked products.

Race was an important determinant of expenditures with Black house-
holds often predicted to spend $2.00 per week more on fresh fish pro-
ducts than Whites. Whites tended to have larger expenditures on
canned fish. Of the adult equivalent scale variables adult males and
females, and elderly males had a larger impact on expenditures than
infants or elderly females. Occupation had no consistent impact on
purchases while urbanization had an impact only in the Northeast and
West. Education was significant for canned fish expenditures in all
regions.



CHAPTER I
INTRODUCTION

One traditional use of the world's freshwater and marine resources
has been as a source of food. In particular, they have long been ex-
ploited as sources of high quality animal protein. In the United States,
per capita consumption of fish and shellfish products has steadily in-
creased during the past two decades. In 1960, per capita consumption of
fish and shellfish was 10.3 pounds edible meat weight. By 1970, this
had increased to 11.8 pounds. In 1978, per capita consumption reached
a record level of 13.4 pounds [U.S. Department of Commerce, 1979]. These
figures reflect only consumption of those products moving through commer-
cial channels. Per capita consumption from recreational catches is esti-
mated to be three to four pounds annually [U.S. Department of Commerce,
1980]. Thus, actual consumption of fishery products in the United States
is somewhere in the neighborhood of 16 to 17 pounds of edible meat per
person annually. With respect to the overall level of consumption,
the United States ranks 39th of 132 countries worldwide. On a live
equivalent basis, this amounts to 35.1 pounds per capita annually which
compares with a high of 164.7 pounds for Japan and an annual world average
of 28.9 pounds [U.S. Department of Commerce, 1979]. For the world as a
whole and the United States in particular, the increases in consumption
of fishery products seen in recent decades are likely to continue. The
Food and Agricultural Organization of the United Nations predicts fish
and shellfish consumption will probably increase through 1990 at a growth

1



rate in excess of that seen for beef, pork, vegetables, cereal, and
milk [Office of Technology Assessment, 1977]. This projection is the
result of several factors. In developed countries, changes in tastes
are shifting consumption patterns away from red meats to consumption of
leaner protein sources including fish [Comptroller General of the United
States, 1976]. Combining with this is the continued increase in popula-
tion of developed and developing countries, which in itself increases
overall use of these products. Thus, fish and shellfish are becoming
more prominent parts of household diets and will continue to do so in
the next ten to twenty years. As this trend develops, additional in-
formation about households consuming these products will be useful to
many sectors.

The programs involved with the passage of the Fisheries Conservation
and Management Act of 1976 (PL 94-265) require the public sector to have
information about consumers of fishery products. The legislation has
implications for many areas other than those directly involved in uti-
lizing or regulating the marine resource. Expressed in the bill is the
desire that the ocean resource be used to provide society maximum social,
biological, and economic gain. One stated objective in achieving this
is to encourage expansion of the American fishing industry. Specifically
proposed goals include: ". . . [encouraging] the development of fish-
eries which are currently underutilized or not utilized by United States
fishermen. ... and [revitalizing] the existing fishing industry, ..."
(PL 94-265, Section 2, pp. 2,3). In line with these objectives, the
Office of Technology Assessment has identified three critical areas which
must be developed if PL 94-265 is to succeed. These are: 1) stock
enhancement, 2) creation of markets for fish and shellfish U.S. fishermen



do not currently harvest, and 3) a revi tal ization of the industry as a
whole [Office of Technology Assessment, 1977, p. 95]. The programs
developed in these areas will directly affect household use of fish and
shellfish products. However, just as these programs will affect house-
holds, the acceptance with which they are received by this same group
will directly determine their success. In particular, household behavior
will have a pronounced effect on the success of programs coming from the
OTA's latter two mentioned critical areas. This relationship, that
between the success of these programs and the behavior of the American
consumer, arises directly from economic theory. Here it is stated that
in a market economy it is the wants and desires of consumers which ulti-
mately dictate how and where resources are utilized [Leftwich, 1976,
p. 19]. The prices consumers are willing to pay and the quantities they
are willing to take ultimately direct production effort. Because of this,
consumer behavior is of paramount importance to the success of any pro-
duction or marketing program. Information giving insight into consumer's
tastes, preferences, or behavior should therefore be a valuable aid. It
should also assist governing bodies enacting legislation affecting
production or marketing programs. Processors, packers, and other com-
ponents away from the actual production process will likewise benefit.
By better understanding their target markets, they will be in a position
to use society's resources more efficiently. They will gain the ability
to cater more directly to the whims and desires of their customers. In-
formation of this type should eventually affect advertising programs,
product development and design.

The difficulties resulting from ignoring market and consumer informa-
tion have been recognized. Academic institutions frequently act as a



research and development arm for private industry. When they make
recommendations regarding new products and product forms they have to
seriously examine information relating to potential consumers of these
products. The Sea Grant program of the National Oceanic and Atmospheric
Administration is an excellent example of one area in which information
of this type can provide guidance. Historically, product development
and work to reduce costs and streamline processing have dominated re-
search efforts. The consumer's end of the market spectrum has often been
ignored. Because of this, much Sea Grant effort to develop new products
has been unproductive [Smith, n.d.]. This has resulted in part from the
tendency to examine the situation from the producer's veiwpoint, ignoring
the implications of consumer characteristics, desires and tastes [Smith,
n.d.]. Too few conscious attempts have been made to coordinate produc-
tion activities with the wants of consumers. Information about consumer
behavior can be used to guide development of products and lessen the
chance of wasting resources on products which are likely to fail or
enjoy only limited success. In this way, knowledge of consumer desires,
tastes, preferences and other characteristics can be used to enhance
the possibilities of success of the products recommended by institutional
research as well as those of the private sector.

The amount of information available about consumer behavior relating
specifically to fishery products has been limited. The actual and poten-
tial increases in consumption of fish and shellfish foreseen because of
changing preferences, continued increases in population level, and
consequences of stated goals of several aspects of PL 94-265 will, in
all likelihood, be substantial. Information about consumer behavior
relating to these goods will therefore be a valuable aid to the various



groups whose decisions will affect the production, processing, marketing
and consumption of these products.

Problem Statement

Through the past twenty years, per capita consumption of fish and
shellfish in the United States has increased. This has resulted in part
from a shift in tastes and preferences away from red meats to leaner
sources of protein including fish [Comptroller General of the United
States, 1976]. Thus, markets for fishery products have strengthened
gradually through these two decades. This trend is projected to con-
tinue with gains in consumption of fish and shellfish products exceeding
projected growth of such traditional protein sources as beef, pork, and
milk. Higher per capita consumption of fishery products is expected to
continue at least through 1990.

The passage of the Fisheries Conversation and Management Act of
1976 may affect the trend in seafood consumption. As a component to
meeting the stated objective of revitalizing the U.S. fishing industry
it encourages increased usage of the food potential of the nation's ocean
resource. The strengthening of existing markets and development of
markets for new products are essential if this is to be accomplished.
The success of the programs designed to affect this increase in con-
sumption depend directly on consumer motivations and their attitude to-
ward the resulting products. Consumer behavior plays a critical role
in determining the products they select in the market. Knowledge of
consumer characteristics, motivations, preferences, and the implication
these factors have on behavior can aid those designing programs to carry
out policy goals by providing insight into how consumers can be expected



to react to alternative program schemes. This information can give
valuable guidance in program formulation and in selecting for imple-
menting those which will be most effective and efficient and likely to
succeed.

Coupled with this specific need for information about consumer be-
havior and expenditure patterns on fishery products is a more fundamental
need for basic fish and shellfish consumption information. In the past,
basic information relating to parameter magnitudes has been infrequently
available for broad aggregates of these products at the national and
regional level. As fish and shellfish become a more significant part
of the American diet, such information will be useful in providing more
knowledge about consumption of these goods. Possibly of even more value,
it will allow comparisons with similar parameters of other consumer pro-
ducts. The understanding gained through comparisons of this type is
one avenue through which knowledge is increased. An increased level in
the store of basic information places the research, production, marketing
and consumption coalition in better position to make even greater improve-
ment in the efficient utilization of this and other food resources.

Objectives
The purpose of this dissertation was to provide basic information
relating to household consumption of fish and shellfish products in the
United States. Specifically, the objectives of the research were to:

1) Develop an econometric model relating household expenditures
on fishery products to the household's socioeconomic and demo-
graphic characteristics.

2) Determine behavioristic parameters (elasticities), quantifying
consumer response to changes in given variables both in the



household and in the market place for broad aggregates of
fishery products.

3) To determine the significance of food stamps on fishery
product expenditures for those households receiving them in
the 1972-1974 Bureau of Labor Statistics diary survey sample.

4) To allow comparisons with previous research, a tabular analysis
of average fish and shellfish expenditures made by households
included in the Bureau of Labor Statistics, survey is made
after the sample was stratified by a series of socioeconomic
and demographic factors.



CHAPTER II

PREVIOUS WORK RELATING SOCIOECONOMIC AND
DEMOGRAPHIC FACTORS TO FISH AND SHELLFISH CONSUMPTION

Demand Analysis of Fish and Shellfish Products

Previous analyses examining the income consumption relationship
specifically for fishery products have not been available with great
frequency. The balance of previous work has examined the Engel re-
lationship only for particular species or groups of species [Johnston
and Wood, 1974]. Other research has examined characteristics affecting
consumption of fish and shellfish products by households in given cities
or regions of the country. Work relating to consumption of broad aggre-
gates of these products by households at the national level has been
provided [Nash, 1970] but has not been available with the regularity
of literature on other comparable food commodities such as milk pro-
ducts, red meats or poultry.

Purcell and Rauniker [1968] analyzed household demand for fish and
shellfish focusing on consumer reactions to changes in prices, price
relations, income, and other socioeconomic factors. The data were
obtained from a consumer panel in Atlanta made up of 160 housholds from
1958 through 1962. Pooling of the cross-sectional and time series data
yielded 3,200 observations on which their analysis was based. The authors
divided their analysis into two parts. The first involved a cross-
tabulation of socioeconomic effects on the consumption and expenditures
for various fishery products; the second involved the effects of various



explanatory variables on consumption and expenditures for selected
fish and shellfish products.

Included in the cross-tabulation was information for both house-
hold and per capita quantity consumed, average value of consumption,
quantity purchased by income groups, quantity purchased by household
size, expenditure by household size, and quantity purchased and expendi-
ture by race. Twenty-seven fish and shellfish categories were examined
for each of the socioeconomic characteristics considered. The results
were reported in dollars for each commodity and as a percent of total
expenditure. All information considered related to five-year averages.

Purcell and Rauniker's [1968] second analysis centered around four
different models and seventeen different variables. All models were
based on the simple linear form with the differences involving the income
variables. The four forms of the income variable considered were linear,
squared, square root, and cubed root. Other variables included were
race, five age categories of household members, quarters of the year,
quantities received as gifts, a time trend and a single variable repre-
senting the price of the given fishery product category. Summary
statistics (weighted average purchases by quarter, by income, etc.) were
reported for price, race, trend, number of persons, income and season
coefficients. The information reported involved thirteen different
fish and shellfish categories.

The cross-tabulations showed the quantity of fresh fish purchased
per household to be 14.53 pounds, which was the largest for any category
or product considered. Total average annual expenditure for all fish
and shellfish by household was $17.46. On a per capita basis, annual


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Online LibraryJonathan S. PerryEconometric analysis of socioeconomic and demographic determinants of fish and shellfish consumption in the United States → online text (page 1 of 12)