other states. The purpose of this section is to present the specifica-

tion and estimation of a system of interrelated price equations for the

GMRFF which are similar in nature to those discussed in the previous

chapter. The discussion that follows first addresses issues involving
 8
the appropriate structure of the price equations. The choice of the

appropriate estimator and the estimation scheme utilized are then

discussed.


Aggregation Across Species

 As with the catch equations, the price equations must be specified

in aggregate terms. The basic reason for this relates to the data

limitations which required the catch equations to be specified in terms

of the aggregate catch of reef fish. Thus, to be compatible with the

catch equations, the price relationships must be specified in terms of

an aggregate "price" of reef fish. Within the model "price" of reef

fish serves as a measure of the average value per pound produced by reef

fish vessels.

 The degree to which such a "price" can be used in deriving valid

 price equation estimates depends on many factors. These factors include

 the similarity of the prices and markets for red snapper and grouper,

 the relative magnitudes of each species in total catch and the similarity

 of the price responses to changes in catch for each species. Since

 1957, the dockside price of red snapper has been about twice that of

 grouper (U.S. NMFS, 1957-75). Over this period both have exhibited



 8The term price in this section pertains to the nominal dockside or
 ex-vessel price.