Understanding regional variation in fish prices : evidence from a developing economy

Purpose: This paper examines the prices of fishery products (an important source of protein for the poor) and drivers of their inter-regional variations in India, where fishery is a critical sector. By explaining regional price differences, we make an attempt to derive policy implications as to how fish price inflation can be controlled. Design/methodology/approach: The paper is primarily based on secondary data provided by the Ministry of Agriculture, Government of India. In the absence of data on inter-regional trade, appropriate indicators are constructed using the gravity model to capture supply side factors that may influence regional price differences. Pooled regressions are carried out for a representative marine and an aquaculture fish variety separately for the period 2011 to 2017. Findings: After controlling for income levels, it is found that marine fish prices can be reduced by improving intra-state transport infrastructure. For reducing the price of aquacultures, it is shown that it is imperative to reduce the distance between producers and consumers. Research limitations/implications: The study is limited by the availability of data on interstate trade and consumption of fish and has only used prices of representative fish varieties instead of average marine and aquaculture fish prices. Originality/value: This paper considers trade and value chain based business theories to explain regional price differences. It analyzes the drivers of relative price differences and suggests measures to control them using a gravity model of trade.