DOES THE RACE AFFTECT TO FISH PRICE AT FULTON FISH MARKET?

Agricultural market is usually considered as a highly competitive market, and one of the main features of competitive market is the rule of one price. However, in the “Testing for imperfect competition at the Fulton fish market” research in 1995, Kathryn had observed that different customers paid different prices for the same kind of fish at Fulton market in New York City. More detail, Kathryn considered that white consumers paid 7% more than the Asian paid for whiting. This is a situation that opposites with the competitive market characteristics. That is the reason why the author collected data to test if the race has an effect on the price at Fulton fish market.

Fist of all, the author chose whiting for the study and to collect the data because of three reasons. The first reason is whiting took place in many transactions, and it appeared more than other fishes. Moreover, whiting does not have much difference in size and in quality. The last reason is that from the collected data, it suggested that whiting salesman should be the only observation in the research. To collect data, the author used two methods, one from the inventories sheet of dealer because all transactions were shown in the sheets. The second method is collecting data by hand. The author had recorded 489 transactions in whiting for 19 days he spent at the market. He considered that the transactions being collected by hand closely matched with the information from the inventory data sheets.

Some of descriptions from the data are: price fluctuates from $0.82/ lb. to $0.89/ lb. from Monday to Friday. The average quantity received round 7,454 lb., the average quantity sold around 7,540 lb. There are three ethnic groups at Fulton market are: Asian group, black group and white group. Asian is the largest buyer group at this market, purchasing 62% of total quantity sold. The variables are: time of trade, a dummy variable, TIM1 if the transaction took place before 5am, from 5 am to 6 am is TIM2. MLOC is also a dummy variable, receives value 1 if the location is in Manhattan or in Brooklyn, STORE receives value 1 if the establishment is a store, dummy variable ASIAN equals to 1 if the customer is Asian, dummy variable BLACK equals to 1 if that customer is black, average quantity purchased by customer during the study period is AVQUAN, CASH is also a dummy variable, receives value 1 if that transaction in cash, REG is the number of times that a customer make a purchase in this period.

The model is:

Price = 0.0074 TIM1 + 0.019 TIM2 – 0.019 MLOC + 0.0247 STORE – 0.0635 ASIAN + 0.0004 BLACK -3.97 AVQUAN + 0.0168 CASH – 0.0007 REG

The regression supported the idea that race have an effect on the price of whiting at Fulton fish market. According to the model, holding other factors fixed, an Asian buyer paid 6.35% less than a white consumer did. Moreover, a black also paid 0.4% for whiting more than a white customer did, held other factors constant. There is a significant difference in the price between Asian and white customer. Therefore, race has affected to the price at Fulton fish market, and this conclusion supported that the Fulton is an imperfect competition market.