Browsing Reports by Subject "volatility"
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Price Formula Options for Alaska Pink SalmonThe wide swings in fishermen's prices for Alaska pink salmon in recent years has reawakened interest in the possibility of introducing price formulas under which fishermen's prices would be based on the wholesale prices received by processors. There are a wide variety of possible formulas which would have different implications for fishermen and processors. This paper presents a simple framework for thinking about price formula options. To illustrate historic trends in wholesale prices and fishermen's prices, and to illustrate how different price formula options would have worked during the period 1980-1991, I used Alaska statewide data for average wholesale case prices, average fishermen's prices, and statewide harvest volumes. I used the Anchorage consumer price index--the only price index available for Alaska--to adjust prices from nominal to "real 1991 dollars". None of these data necessarily reflect the situation of salmon fishermen or processors in specific regions of Alaska, since wholesale prices, harvest prices, harvest volumes, and inflation rates differ for different regions. However, whether or not these data accurately represent what happened in specific regions does not matter for this paper: the main purpose is to illustrate how different price formulas work and their advantages and disadvantages for fishermen and processorsPrepared for discussion at a conference on Toward Prosperity Through Stability: Making the Most of Alaska's Pink Salmon October 30-31, 1992 in Ketchikan, Alaska.