MARKET DELINEATION AND DEMAND STRUCTURE

This paper addresses relationship between the cointegration approach t o market delineation and the more traditional approach of analyzing th e demand structure among different products in terms of degree of subs titutability. Cointegration tests for market delineation and estimatio n of a dynamic system of demand equations are undertaken utilizing the same data set. The data set consists of three high-quality seafood pr oducts in the European Union. The results are encouraging as the resul ts from the two approaches are not only compatible, but are also compl ementary in the sense that they provide more information together than they do separately.