Stochastic modeling and financial viability of mollusk aquaculture

Abstract

Compared to finfish and crustaceans, limited attention has been given to the economic modeling and production risk analysis of mollusk aquaculture. Given mollusk aquaculture's sensitivity to environmental factors, understanding production risk and its relationship to production technology and location is critical to firm viability. We modeled production as a function of random elements and performed stochastic risk analysis utilizing Monte Carlo simulation in conjunction with sensitivity analysis and scenario comparison. We applied these methods to compare different equipment systems and production strategies. This paper provides a framework for shellfish risk research that can be applied to various regions and species.