Discussion Paper Details

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Title: The local effects of an innovation: Evidence from the French fish market

Author(s): Laurent Gobillon and François-Charles Wolff

Publication Date: January 2017

Keyword(s): difference in differences, discontinuity, factor models, fish, innovation, product prices, product quality and synthetic controls

Programme Area(s): International Trade and Regional Economics

Abstract: In this paper, we investigate the effect on quality, quantity and prices of an innovative fishing gear introduced for a subsample of vessels on a single wholesale fish market in France. Estimations are conducted using transaction data over the 2009-2011 period during which the innovation was introduced. Using a difference-in-differences approach around the discontinuity, we find that for the treated the innovation has a large effect on quality (29.2 percentage points) and prices (23.2 percentage points). A shift in caught fish species is observed and new targeted species are fished very intensively. We also quantify the treatment effect on the treated market from aggregate market data using factor models and a synthetic control approach. We find a sizable effect of the innovation on market quality which is consistent with non-treated vessels adapting their fishing practices to remain competitive. The innovation has no effect on market quantities and prices.

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Bibliographic Reference

Gobillon, L and Wolff, F. 2017. 'The local effects of an innovation: Evidence from the French fish market'. London, Centre for Economic Policy Research.