1.2 How Is It Changing?
According to FAO's HISTORICAL
CONSUMPTION AND FUTURE DEMAND FOR
FISH AND FISHERY PRODUCTS, the world
average per capita fish consumption has shown an
upward trend from 1965 to 1995. Especially in Asia,
fish consumption and consumption growth rate are
higher than in other continents (Ye, 1999). Many
factors affect fish consumption, but they can be
classified based on the relationship between supply
and demand. For example, factors affecting supply
include price, weather, production costs, government
policies, etc. (Hu, Pan, Zhang, Tao, 2020). Factors
affecting the market include income, substitutes and
complementary products, and product quality (Hu,
Pan, Han, Lin, Tao, 2020).
1.3 Objectives
Since fish meat is essential for human protein intake,
fish consumption is a crucial indicator of people's
protein intake or health. The main goal of this article
is to find appropriate exogenous variables to establish
a supply equation model that conforms to the laws of
the market based on the relevant data from 2003 to
2017 in China to predict the future consumption of fish
in China to provide essential data for people's protein
intake.
2 METHODOLOGY
2.1 Data Source
The data in this article comes from Chinese national
data, our world data, and statist. Among them, the ex-
factory price index of industrial producers
(1985=100), the current value of the market price of
eggs (ordinary fresh eggs) (yuan/kg), hairtail (0.5-1)
(Kg), the current value of the market price (yuan/kg)
and the per capita GDP (yuan) come from Chinese
national data. Fish and Seafood supply quantity
(kg/capita/yr) comes from our world data. Annual
anomalies in global ocean surface temperature from
1880 to 2020, based on temperature departure (in
degrees Celsius), comes from Statista.
2.2 Supply and Demand Function
1) Demand Function: A demand function is
defined by π = π(π₯)where π measures the unit price
and π₯ measures the number of units of the commodity
in question and is generally characterized as a
decreasing function of π₯; that is, π=π(π₯) decreases
as x increases. Since both π₯ and π assume only
nonnegative values, the demand curve is that part of
the graph of π(π₯) that lies in the first quadrant
(figure.1) (Pettinger, 2021).
2) Supply Function: A supply function defined
by π=π(π₯)with π and π₯ as before is generally
characterized as an increasing function of π₯; that is,
π=π(π₯) increases as π₯ increases. Since both π₯ and
π assume only nonnegative values, the supply curve
is that part of the graph of π(π₯) that lies in the first
quadrant (figure.1) (Economic Models, 2021)..
Figure 1: Example of a supply curve (in blue) and a demand
curve (in red). The point of intersection corresponds to
market equilibrium.
2.3 Simultaneous Equations Models
1) Introduction to Simultaneous Equations Models:
A simultaneous equation model is a statistical model
in a set of simultaneous linear equations. They differ
from regular regression models because there are two
or more dependent variables (Pettinger, 2021).
Because the concurrent equation model can solve the
endogenous relationship between variables. For
example, the variable price is both an explained
variable and an explanatory variable to express
quantity. The same is true for the number of variables.
So, I choose the simultaneous equation model to solve
the supply and demand equation.
2) Variable Selection of Price of Fish: This
article uses the price of hairtail to replace the price of
fish because data on fish prices in China has not been
found. The production of hairtail is relatively large,
and it is distributed in China's Yellow Sea, East China
Sea, Bohai Sea, and even the South China Sea.
3) Variable Selection of Supply Function:
Supply refers to the quantity of a good that the
producer plans to sell in the market. The pool will be
determined by price, the number of suppliers, the
state of technology, government subsidies, weather