Demand for Imported Fish Products in Egypt: A Cointegration and Error Correction Analysis الطلب علی واردات الأسماک ومنتجاتها فی مصر : تحلیل بأستخدام التکامل المشترک وتصحیح الخطأ.

Abstract

This paper examined the determinants of fish products import demand in Egypt between 1980 and 2007. Exogenous variables were selected based on demand theory and the traditional import demand functions. Quantitative estimates were based on OLS as well as cointegration and error correction models. The results confirmed the existence of long-run equilibrium relationship between fish import demand, consumption expenditure, exchange rate, and prices of imported and domestically produced fish, on per-capita basis. The estimated import demand functions fit the data well. Estimated coefficients had the correct signs in the short and the long-run functions. The results showed that in the long-run imported fish products were inelastic with respect to its own price, price of locally produced fish, real exchange rate, and consumption expenditure. Cointegration results showed that the long-run import elasticities of demand with respect to import price, locally produced fish price, real exchange rate, and consumption expenditure were-0.39, 0.36,-0.29, and 0.82, respectively. The dominant determinant of fish products import demand in the short and long-run is consumption expenditure meaning that economic growth would lead to higher import demand. Results of the estimated short-run equation indicated that any deviation from long-run equilibrium in per-capita fish import demand is completely corrected the following year. Measures to support fish sector in the area of production, transportation, and marketing could lead to reduction in fish prices and in imports and dampen the increase in import demand that is driven by economic growth.