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ISSN : 1225-1011(Print)
ISSN : 2288-1727(Online)
The Journal of Fisheries Business Administration Vol.48 No.2 pp.1-17

AVariability Analysis on the Flatfish Production and Revenue using Expectation Hypotheses and GARCH Model

Hyung-Mo Yoon,Ji-Young Yoon


This work studies the variability of flatfish sales revenue. The theoretical analysis draws functions for equilibrium price and quantity using expectation hypotheses. The functions include unpredictable phenomenon with dummy variable and GARCH. The equilibrium function, using adaptive expectation hypothesis, contains the independent variables of supply and demand, while the equilibrium function, embodying rational expectation hypothesis, includes only the independent variables of supply side, because the demand side disappears by the information extraction process theoretically, if economic subjects build the expectation rational.
The empirical analysis shows: the variability of flatfish production has a spillover effect on the variability of revenue with the adaptive expectation hypothesis. In the case when the model has a rational expectation hypothesis, the variability of flatfish production has a spillover effect on the revenue (the mean equation of GARCH model). This study indicates that there is the variability in flatfish production and sales revenue, and the spillover effect between them. The result can help to build of the rational system for the fishery income stability.