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Technology selection - the impact of economic risk on decision making
journal contribution
posted on 2023-05-19, 02:27 authored by King, AS, Elliott, NG, James, MA, Catriona MacLeodCatriona MacLeod, Bjorndal, TDeveloping an understanding of economic variance (risk) is critical when evaluating alternative aquaculture production technologies. This article assesses the efficacy of employing a quantitative stochastic analysis technique to support technology selection decision making by undertaking a case study investment assessment of three alternative production expansion strategies (offshore sea-pens, land-based RAS growout and larger post-smolt) for the Tasmanian salmon industry. Results demonstrate that salmon aquaculture is undertaken with considerable underlying levels of economic risk, expansion offshore probably represents the lowest initial capital investment and greatest economic return, and that levels of financial uncertainty increase with land-based RAS production. The study highlights stochastic modeling provides significant “added-value” over single-point deterministic analysis and that developing an appreciation of the input variability is a key component in critically evaluating alternative production technologies.
Funding
Australian Seafood Cooperative Research Centre
Fisheries Research & Development Corporation
History
Publication title
Aquaculture Economics and ManagementVolume
22Pagination
383-409ISSN
1365-7305Department/School
Institute for Marine and Antarctic StudiesPublisher
Taylor & FrancisPlace of publication
United KingdomRights statement
Copyright 2016 Taylor & FrancisRepository Status
- Restricted