Risk efficient juvenile haddock production systems: an ex-ante recursive stochastic approach.

The risk efficient live feed system for juvenile haddock production is derived through recursive ex-ante stochastic cost estimation. Four alternative feeding technologies are simulated to capture the economic costs associated with live feed and juvenile production and scale economies are investigated by simulating three production levels. Using Monte Carlo simulation techniques, multivariate stochastic cost functions are derived in a time-dependent recursive production model. With the current technologies and price levels, land-based juvenile haddock production is viable. The marginal impact, in terms of cost-savings, to additional research on optimal feeding periods will be minimal. On the other hand, the high opportunity cost of capital used in aquaculture production, due to numerous perceived risk premia, may pose a more immediate constraint for capital formation and industry development. [ABSTRACT FROM AUTHOR]