Testing for market linkages between Hawaii and Japan's tuna markets

Even though international and regional fish markets may be geographically dispersed, the prices across different markets may exhibit long-run spatial linkages, suggesting that certain locations are integrated and that prices provide relevant market signals. In other words, it is possible that fish prices in different markets may vary in the short run but maintain the equilibrium in the long run. This paper tests whether the markets for yellowfin tuna and bigeye tuna in Hawaii and Japan are integrated. To this end, market integration test procedures are applied to determine whether there exists market linkage among the fish markets using semi-monthly average wholesale price data recorded in Honolulu's and Tokyo's wholesale markets. The market integration tests also provide a study of tuna pricing in Hawaii from the perspective of market price linkage, to understand whether markets outside Hawaii influence local pricing.

► We test whether the markets for yellowfin tuna and bigeye tuna in Hawaii and Japan are integrated.
► Market integration test procedures are applied using semi-monthly average wholesale price data.
► Bigeye markets are spatially linked with Japan plays a dominant role.
► No price linkages between markets are observed for yellowfin.