AGNELLO and DONNELLEY: INTERACTION OF FORCES 



demand indicating demand for oysters to be 

 price-responsive. 



In order to determine meaningfully how re- 

 sponsive quantity demanded is to price and income 

 changes, it is useful to investigate the elasticities 

 implied by the statistical results. Tables 1 and 2 

 indicate high elasticities in both the Middle 

 Atlantic and Delaware Bay regions implying that 

 oysters are price elastic and normal with respect to 

 consumer income responses. If supplies were to 

 increase in the future, one would expect increasing 

 revenues for the oyster industry.'' Similarly we 

 might expect consumer demand for oysters to 

 increase by larger percentages than real personal 

 income in the future. Efforts to rehabilitate the 

 oyster industry by cleaning up water pollution, 

 discouraging overfishing, and replacing oyster 

 cultch may thus have large social values. 



Although the statistical results do lend support 

 to the model, they are certainly not without 

 difficulties. The time series problem of positive 

 serial correlation is present throughout, thus de- 

 tracting from the reliability of the results. The 

 Durbin-Watson statistics in general indicate 

 either positive autocorrelation or indeterminancy 

 for the Middle Atlantic and Delaware Bay regions 

 respectively using a two-tailed test at the 0.05 

 level of significance.'* An additional problem im- 

 pairing both estimation and prediction is struc- 

 tural change with data over a long time period. 

 Parameters therefore may not remain constant 

 with time series data. Also variables omitted from 

 the model may have caused shifts in the functions 

 over time. All of these problems make prediction 

 hazardous and definitive conclusions should await 

 further testing based on new data sets. 



CONCLUSIONS 



In general the statistical results support the 

 model of supply and demand forces in the Middle 

 Atlantic oyster industry. Estimates are generated 

 on income and price elasticities of demand and 

 lend optimism to the current rehabilitation efforts 

 directed toward the oyster industry. The MSX 

 disease has clearly had a debilitating effect, 



'^It has been reported by the Delaware State Department of 

 Natural Resources and Environmental Control that oyster spat 

 count recently have been the highest in several years indicating 

 augmented supplies to be highly probable in the future. 



"When first differences are used to remove serial correlation, 

 R' and t values fall to unacceptably low levels although serial 

 correlation is removed. 



however, and must be solved as a condition of suc- 

 cessful industry recovery. 



The common property characteristics of the in- 

 dustry have also harmed the industry's progress. 

 There exists evidence of overfishing in common 

 property states, and hence less than optimal 

 exploitation of the natural resource stocks. The 

 results indicate that depletion is a much more 

 serious problem for the Chesapeake Bay states 

 than for the Delaware Bay states where private 

 leasing of subaqueous lands is more prevalent. 

 However, the reverse is true concerning the MSX 

 disease characteristics of the regions. 



ACKNOWLEDGMENTS 



Research for the paper was funded under the 

 Sea Grant Program of the National Oceanic and 

 Atmospheric Administration, U.S. Department of 

 Commerce. We wish to express our thanks to the 

 anonymous reviewers for many helpful comments 

 on an earlier version of this paper. Any errors 

 remaining are, of course, entirely our respon- 

 sibility. 



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