Satisfying Norwegian appetites: Decoding regional demand for shrimp

Summary

This study investigates the regional demand for shrimp in Norway by employing the linear approximated Almost Ideal Demand System (LA/AIDS) framework. Shrimp consumption has grown significantly globally, with Norway being no exception. The LA/AIDS model allows us to examine the demand of shrimp across different regions in Norway. We utilize comprehensive data on regional shrimp consumption, prices, and household expenditures to estimate and analyze demand patterns. Moreover, we can distinguish between farmed (freshwater) and wild (coldwater) shrimp. Our findings reveal consistent patterns across regions, with fresh coldwater shrimp emerging as a dominant product form, often substituting for other shrimp species. Furthermore, regional variations in substitution relationships highlight the nuanced nature of the markets, with differences in the intensity of competition and the extent of substitution effects. We also provide the theoretical relationship between regional demand and the aggregate demand at the national level.