PCAIDS and Growth Index Demand Modelling for Imported Cod Products in Portugal. ‘Special Issue – Fisheries and Aquaculture’

The demand function represents the fundamental building block in economics and provides important information for investment and policy purposes. The aim of this paper is to characterize and measure the demand structure for imported cod products to Portugal. A PCAIDS model is used to identify and measure own- and cross-price elasticities of demand for frozen, salted and salted & dried cod products. The calculated elasticities of demand are then used in combination with a demand growth index model to measure shifts in demand impacting price of product. Controlling for supply shocks the growth index shows over the period a positive growth in demand for frozen product but a negative change in demand growth for salted, and to a lesser degree, for salted & dried products. The results are used in simulating alternative price demand scenarios.