Scandinavian Working Papers in Economics

Working Papers in Economics,
University of Bergen, Department of Economics

No 4/18: Perish or prosper: Trade patterns for highly perishable products

Frank Asche (), Hans-Martin Straume () and Erling Vårdal ()
Additional contact information
Frank Asche: Institute for Sustainable Food Systems and School of Forestry Resources and Conservation, University of Florida and Department of Industrial Economics, University of Stavanger
Hans-Martin Straume: Department of Economics, BI Norwegian Business School
Erling Vårdal: University of Bergen, Department of Economics, Postal: Institutt for økonomi, Universitetet i Bergen, Postboks 7802, 5020 Bergen, Norway

Abstract: In recent years trade with highly perishable agricultural products like fresh fish, berries and cut flowers has increased substantially. The perishability of these products appears to challenge conventional wisdom when it comes to food trade, which emphasizes the importance of large shipments to reduce transportation costs. In this paper, gravity models and several margins of trade are estimated for the trade with fresh salmon, a highly perishable product. The results indicate that increased geographical distance have a larger negative effect than what is generally reported in the literature. Most interestingly, the number of exporters and the shipment frequency increase while there is little impact on shipment size when trade increase. Hence, freshness and possibly avoidance of losses by not selling products by the expiration date seem to be emphasized rather than economies of scale in transportation.

Keywords: gravity model; transaction level data; margins of trade; perishable products

JEL-codes: F14; Q22

25 pages, April 23, 2018

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