catch-effort function and the yield per recruit relation 

 for Maine American lobsters that this fishery is 

 grossly overcapitalized. With this much said, let us 

 now turn to some of the economic forces that have 

 produced overcapitalization. 



IV. ECONOMIC RELATIONSHIPS 



A. The Growth in the Demand for Lobsters, 

 1950-69. 



Consumer demand for fishery products is the driv- 

 ing force behind the expansion of a fishery which 

 leads, on occasion, to overfishing. Over the 1950-69 

 period, U.S. per capita consumption of all lobsters 

 (American, spiny, etc.) increased from 0.585 to 0.999 

 pounds (live weight). The rate of growth in per capita 

 consumption was approximately 2.4 percent per year. 

 This was -in sharp contrast to overall U.S. per capita 

 consumption of food fish, which remained relatively 

 constant over the same period at 10 to 11 pounds. The 

 increased consumption came primarily in the impor- 

 tant spiny lobster category. The rapid growth in the 

 consumption of lobsters produced a rise in ex-vessel 

 prices of 4.8 percent per year, which exceeded the 

 growth in all consumer prices, which averaged 1.7 

 percent per year. What were the determinants of the 

 per capita consumption of lobsters? A statistical 

 analysis was made in which the following factors were 

 related to per capita consumption of all lobsters: 



1. ex-vessel price of American lobsters relative to 

 the general price level in the U.S. economy; and 



2. real per capita disposable personal income (stan- 

 dard of living). 



In prior statistical tests, it was found that crab and 

 shrimp prices as well as meat and poultry prices were 

 not significantly related to the per capita consumption 

 of lobsters. It was anticipated that per capita con- 

 sumption of lobsters would fall if ex-vessel prices in- 

 creased faster than the general price level and would 

 rise owing to increasing real per capita income. Figure 9 

 shows the estimating accuracy of our statistical equa- 

 tion, which is consistent with our expectations. This 

 relates the per capita consumption of all kinds of lob- 

 sters to ex-vessel prices and per capita income over the 

 1950-69 period. According to the analysis, a 10 percent 

 increase in lobster prices will reduce per capita con- 

 sumption by roughly 3 percent. However, a 10 percent 

 increase in per capita income would increase per 

 capita consumption about 17 percent. The consumer 

 demand analysis for lobsters indicated that despite ris- 

 ing lobster prices, per capita consumption increased 

 owing to the rise in the standard of living. This pro- 

 vided strong economic incentive to expand the domes- 

 tic lobster fisheries. 



B. Distribution of Lobsters. 



About 87 percent of the Maine American lobster 

 catch is distributed live. Fishermen sell to local 



buyers, retail trade, and large dealers. Table 13 shows 

 the estimated markup of lobster prices over the ex- 

 vessel level over the 1959-71 period. Unfortunately, 

 retail prices are only available through 1967 at New 

 York City. Over the 1959-67 period, lobster fishermen 

 have been getting an increasing share of the final retail 

 price. The wholesale and retail markup has been de- 

 clining somewhat as indicated by the figures in Table 

 1 1. It must be concluded that cost pressures are com- 

 ing proportionally more at the ex-vessel level than at 

 wholesale or retail. 



On the average, the wholesaling function has added 

 approximately 43.5 cents to the price of lobsters over 

 the ex-vessel level while the retailing function has 

 added 26.6 cents to obtain the final price. 



C. Regional Consumption of Lobsters. 



A consumer survey panel, consisting of representa- 

 tive households throughout the United States, re- 

 corded their fishery product purchases for a 12-mo 

 period, beginning in February 1969. They were par- 

 ticipants in a study conducted under the aegis of the 

 National Marine Fisheries Service (formerly Bureau 

 of Commercial Fisheries), Economic Research 

 Laboratory. Part of this study concerned itself with 

 the consumption of lobsters. We thought it might be 

 helpful to look at some of these relationships. 



New England households, according to the survey, 

 account for nearly two-thirds of lobsters purchased for 

 consumption at home. Most of the remaining one-third 

 of lobster purchases are made in the Middle Atlantic 

 and South Atlantic regions (Fig. 10). Home consump- 

 tion in all other regions is insignificant, with the excep- 

 tion of the East South Central area, which accounts 

 for just under 5 percent of the total. The figures rep- 

 resent fresh lobster and consist chiefly of American 

 lobster. It is likely, however, that some of the quantity 

 attributed to the southern area states represents local 

 spiny lobster. 



New England's predominance in at-home lobster 

 consumption reflects the difficulties, and high cost, of 

 shipping live lobsters from the producing areas. Tradi- 

 tion, of course, insures a strong local market for lim- 

 ited supplies of American lobsters. It should be 

 noted, however, that the survey also revealed that 

 home consumption of lobsters represents only 40 per- 

 cent of the total quantity consumed in the United 

 States. Thus, with restaurant consumption taken into 

 account, the regional distribution may not favor the 

 New England area quite so heavily. Nonetheless, the 

 important inference to be drawn from the at-home 

 consumption distribution is that out-of-area retailers 

 are reluctant to assume the risks of marketing live lob- 

 sters, which are highly perishable outside their normal 

 environment. Consequently, in the event that lobster 

 production should be increased — and this is a possibil- 

 ity with deep-sea lobster fishing — improved ways of 

 handling lobsters will be needed to enhance retailers' 

 dispositions toward marketing the product. 



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