The degree to which this bias is incurred rests on the similarity

or dissimilarity of the price responses to changes in catch for each

species. To see this, let


 Pkt = aok + YkCkt k = S, G (65)


denote the price equations for red snapper, (S), and grouper, (G). Now,

if instead of equation (65) the price equation is written as

 Pt = a + YCt (66)


where Pt = w1 Pst + W2 P w + 2 = 1 and C = C the estimated

parameters will correspond to a = W aoG + W2aoG and y = wls + W2Yg.

If, however, s = Yg = Yo, the price response parameter in equation (66)

will be y = (wl + w2)Yo = Yo since w1 + w2 = 1. To test the equality

of the price response parameters for grouper and snapper caught by

Florida vessels, separate price equations were estimated for each

species. The results of estimation indicated that the price response

parameters were of very similar magnitude (Appendix F).

 The necessity to aggregate across species in specifying the reef

fishery price equations is unfortunate. However, the similarity between

grouper and red snapper as food fish at dockside, the relatively small

size of groupers in the reef fish catches of states other than Florida

and the similarity of the price response parameters of both species for

Florida makes the expected consequences of such aggregation small.

Thus, in the analysis that follows, the price equations are defined in

terms of the aggregate variables, price of reef fish and total catch of

reef fish.