93.3 percent and 89.0 percent of the red snapper and grouper catch,

respectively, was shipped to areas other than the GMRFF states (Appendix

F). The implication of this data is that there should be very little,

if any, interregional trade in reef fish among GMRFF states. This is

significant in that it implies the absence of any systematic price dif-

ferentials across states based on transportation costs, thus simplifying

the price model greatly.

 The information above serves to provide the basis for specification

of the empirical price equations. The price equation for Florida is

assumed to have the form


 Plt = ^01 + 11 C1t + 21t + elt (67)

where Plt is the ex-vessel Florida "price" of reef fish, Clt is the

corresponding catch and t is a time trend variable. Specification of

the disturbance component, e1t, is discussed below. For other states,

the general form of the price equation for the ith state is given by


 it = YOi + li Cit + Y2i Cit + '3it + eit (68)

 i = 2, ..., 5

where Pit and Cit are, respectively, the "price" and catch of reef fish

in state i. Once again, the specification of the disturbance term, eit,

is discussed below.

 Incorporation of the trend variable in equations (67) and (68) was

done to account for demand shifts over time. This variable is a com-

posit proxy for effects such as population and income. The basic reason

these variables were not explicitly incorporated into the price equation