A simple measure of price risk for Tasmanian southern rock lobster (Jasus edwardsii)

Abstract

Fishing firms face many sources of risk. These affect business performance to varying degrees and in a variety of ways. One of the most important economic variables to affect profitability is beach price. When much of the catch is exported, beach prices received by fishing firms are subject to exchange-rate risk as well as changes in foreign demand that are induced by cultural events, season and income shifts.

The approach adopted in the present paper involves evaluating price risk by examining the significance of regression coefficients for an inverse demand function for Tasmanian lobster. These coefficients may be used to enumerate elasticities of beach price with respect to exchange-rate and income measures. The results confirm that movements in Japanese income and the ¥/$A exchange rate have recently accounted for much of the price risk faced by Tasmanian lobster fishing firms.