An estimation of the economic loss for the squid and cuttlefish industry in Japan due to illegal and unreported imports

Abstract

This paper estimates the economic loss for the squid and cuttlefish industry in Japan due to illegal and unreported imports. We developed a simultaneous equation model that consists of demand, harvest, and price equations, and an identity that defines the relationship between demand, supply, and inventory. We estimated the model by both the two-stage least squares and the GMM three-stage least squares methods using monthly data from August 1990 to December 2016. Three scenarios for counterfactual import volumes are assumed based on the estimates by Pramod et al. (2017). Our simulation results suggest that the economic loss may range from 24.3 to 46.9 billion yen, which amounts to 15-29 percent of the total revenue of the industry.