Disaggregated Demand for Fish in Bangladesh: An Analysis Using the Almost Ideal Demand System

The main objective of this study is to analyse the expenditure and price responses of aggregate and disaggregate fish categories through development of a disaggregated demand model and to explain the policy implications of the results obtained. An extension of the Linear Approximate Almost Ideal Demand System (LA/AIDS) is applied here to model the disaggregated fish demand. The AIDS model has been popular in recent times and it has a number of advantages all of which make it attractive for the type of problem addressed in this study. Data used in the analysis were collected from a household panel survey conducted by the author for a year round period. The one-way error component random effects model and the two-step censored regression technique are employed here to estimate the model, which give the better fit of the estimates. Results show that the expenditure elasticities for low and dry fish are less than unity whereas the expenditure elasticities for medium and high fish are highly elastic. The own-price elasticity of low price fish is less than unity whereas the own price elasticity of high price fish is highly elastic. Results also show that the demographic variable has little impact on the demand for fish. The results indicate that the category of low price fish should be given due importance in devising policies for the development of fisheries sector. This is indeed needed from the point of view of fish consumption, particularly, of the vast majority of the poor people in Bangladesh.