Title : Price differentials in a partially integrated seafood market: the U S Atlantic salmon market
When markets are integrated and the law of one price holds, price differentials should vanish in the long run. This, however, is not observed when salmon prices differentials, for the main export countries—Canada, Chile, Norway, and United Kingdom—of farmed Atlantic salmon in the United States market, are analyzed. The results in this article, which are based on the estimation of a cointegrated vector autoregressive model, indicate that there is a single integrating factor common to the four average prices of the main suppliers of farmed Atlantic salmon in the United States market. This suggests that the price of farmed Atlantic salmon is determined within the same market. The law of one price, however, is rejected. That is, farmed Atlantic salmon is an imperfect substitute among U.S. consumers, implying that markets are partially integrated. Consequently, producers of farmed Atlantic salmon from different countries might benefit with strategies aiming to increase the value added of their product. Furthermore, the main exporters follow the lead of United Kingdom.