There does not seem to be a concensus on the income elasticity of demand with respect to fish. A 1978 survey of household expenditure in the Greater Colombo Area indicates that the elasticities of demand with respect to income vary with the income level of the household. This is reasonable and could be expected. The apparent elasticity reached 1 for households with incomes in the Cey.Rs. 400 to 600/month bracket. An increase in income for those households with incomes below Cey.Rs. 400 per month would seem to lead to a proportionally higher increase in the expenditure on fish, i.e., it shows an elasticity of demand with respect to income which is greater than 1 for those households having an income below Cey.Rs. 400 per month.
The Mission has not found any information on the elasticity of demand for fish with respect to price. However, published data allow some speculation. In the period 1972 to 1976, the supply of fish (FWE) declined from 14.51 to 10.86 kg per person and year, a decrease of 25 percent. The price paid to the producer of marine fish increased by 110 percent in the same period (FAO, 1977, p. 31). Simultaneously the cost of living index for Colombo increased by 37 percent with regard to food (Central Bank, 1980, Table 51). If we assume unchanged markups1 the real price increase for fish during the period would have been about 33 percent, and the elasticity of demand with respect to price slightly above unity at -1.06.
During the same period, 1972–76, landings of marine fish had increased from about 92 000 to 121 000 tons. In 1972, then, total receipts by marine fishermen would have been in the order of Cey.Rs. 181 million (or Cey.Rs. 14/inhabitant/year). In 1976 the figures were about 503 million for an average of Cey.Rs. 37/inhabitant/year. How was such an increase possible? Because, in the meantime, imports (mostly of dried fish), had been cut from some 85 000 tons (FEW) to about 15 000 tons: increases in the marine fishermen's income during that period were made possible by the reduction in imports of fish.
The increase in both price and landings of local, marine fish during the 1972–76 period should not be taken as proof that the public will buy any quantity of marine fish at any price. In fact, for the population as a whole the elasticity of demand for fish, with respect to price, is probably not far removed from unity. That means that if the real price of fish increases the quantity consumed (per caput) will decrease at about the same rate.
