The Demand for Fish Products in Malawi: An Almost Ideal Demand System Estimation

Abstract

The study analyzed the demand for fish products and the factors that affect the consumption of various fish products in Malawi. Considering four fish products, namely dried fish, smoked fish, fresh fish and tinned fish, the study employed a multivariate probit model and an Almost Ideal Demand System (AIDS) model to analyze factors affecting consumption and demand for fish products respectively. Results indicate that consumption of various fish products in Malawi is affected by age, education, gender, marital status, area of residence (Urban versus rural), distance to nearest market, household annual expenditure and occupation of the household head. With regard to demand for fish products, the study found that the demand for dried fish, smoked fish, fresh fish and tinned fish is inelastic and the various fish products were found to be substitutes. It was also noticed that households would increase their expenditure on fish products if their income increases. The results are an important step in designing policies that will increase fish production and ultimately increase fish consumption. The results also show the importance of value chain development by, among others, building the capacity of the fish processors in order to help them better respond to the market and consumer needs.

Keywords: Multivariate probit, Fish, Consumption, AIDS model, Demand