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Technology selection - the impact of economic risk on decision making


King, AS and Elliott, NG and James, MA and MacLeod, CK and Bjorndal, T, Technology selection - the impact of economic risk on decision making, Aquaculture Economics and Management, 22, (1) pp. 383-409. ISSN 1365-7305 (2018) [Refereed Article]

Copyright Statement

Copyright 2016 Taylor & Francis

DOI: doi:10.1080/13657305.2016.1261962


Developing 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.

Item Details

Item Type:Refereed Article
Keywords:aquaculture, qualitative modeling, technology, economics, decision making, Monte Carlo simulation, production technology, risk, stochastic modeling
Research Division:Agricultural, Veterinary and Food Sciences
Research Group:Fisheries sciences
Research Field:Aquaculture
Objective Division:Animal Production and Animal Primary Products
Objective Group:Fisheries - aquaculture
Objective Field:Aquaculture fin fish (excl. tuna)
UTAS Author:King, AS (Mr Andrew King)
UTAS Author:MacLeod, CK (Professor Catriona MacLeod)
ID Code:114768
Year Published:2018 (online first 2016)
Web of Science® Times Cited:9
Deposited By:Sustainable Marine Research Collaboration
Deposited On:2017-02-27
Last Modified:2019-03-15

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