The impact of price and yield risk on the bioeconomics of reservoir aquaculture in north Vietnam

A bioeconomic model of reservoir aquaculture in northern Vietnam is used toinvestigate the impacts of price and yield risk on the level, variability and skewness ofexpected net revenue and utility. Prices and yields are assumed to follow lognormaland beta distributions, respectively. Net revenue follows a generalized gammadistribution and is found to be very risky compared with similar enterpriseselsewhere, mainly due to the relatively high yield risk. This represents the nascentnature of the industry in Vietnam and the opportunity for efficiency improvements.Increasing production capacity (through increasing reservoir size, stocking density,production cycle length and harvest rate) are found to increase profits and decreasethe variability of profits. Species diversification was found to reduce the riskiness ofthe enterprise.