To isolate the impact of climate change on fish prices through changes in supply, we have to keep all other factors that can affect price constant: Embedded Image, where P is the price per unit and Q is the quantity of fish demanded, which is assumed to be equivalent to the MCP under different climate scenarios. Embedded Image denotes a vector that represents all other demand determinants, e.g., income, price of substitutes, and inventory changes that are held constant to help us isolate the effect of climate change on the ex-vessel price of fish. It is assumed that an increase (or decrease) in Q with Embedded Image held constant would decrease (or increase) price. This is a conventional assumption that is supported by available empirical evidence, i.e., Embedded Image.

Seafood economists often use demand models to measure the responsiveness of demand to price and income change. Most studies have focused on own price elasticity, which measures the responsiveness of demand to its price change, with everything else remaining constant (14). Here, we instead focused on price flexibility to help us capture both the price and quantity effects of implementing the Paris Agreement. Conceptually, elasticity is estimated from the quantity-dependent demand function (ordinary): Qx = f(Px, Py, I), where Qx is the quantity demanded of product x, Px is the product’s own price, Py is the price of related products, and I is the income.

Price flexibility is defined inversely in that it answers the question, how might price be affected by changing quantity demanded? This concept of flexibility is based on a price-dependent (inverse) demand function: Px= f(Qx,Qy,I), where Px is the price of product x, Qx is the quantity demanded of product x, Qy is the quantity demanded of related products, and I is the income. Inverse demand models are widely used in cases where quantity is constrained by exogenous factors and environmental conditions (e.g., local carrying capacity or regulations such as quotas), including fisheries. In these cases, supply is independent of or less dependent on price, making demand factors the most important for determining price (31).

Here, we analyzed the potential changes in prices under different fish abundances linked to climate change scenarios. Given that the quantity that can be supplied is affected by different climate conditions, coupled with higher demand from a growing population and increasing incomes, prices are likely to be influenced by a demand factor relative to supply. The own-price flexibility used in the analysis can then be expressed as: ψ = ΔPxQx, where ψ represents the own-price flexibility.

We relied on existing literature for the price flexibilities applied in this analysis, including reported flexibilities for species or species groups in developed and developing countries, respectively (table S4). For species or species groups with multiple reported price flexibilities, an average value was used. Because of limited empirical flexibility estimates, some of the own-price flexibilities used in this analysis are the reciprocal of reported own-price elasticities. Mathematically, the price elasticity and flexibility are reciprocal to each other. However, given the likelihood that the demand for fish is substitutable (among fish and/or shellfishes), each reciprocal of own-price elasticity should be viewed as a lower limit (30).

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