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Land subsidence, production efficiency, and the decision of aquacultural firms in Taiwan to discontinue production

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  • Chang, Hung-Hao
  • Boisvert, Richard N.
  • Hung, Ling-Yi

Abstract

For some time the over-pumping of groundwater by aquacultural producers has contributed to severe problems with land subsidence in many areas of Taiwan. This has led to policy initiatives that impose extra costs on groundwater users. By investigating the effects of the conditions of aquifers, production efficiency and other factors on decisions of Taiwanese aquacultural producers to exit the industry, this paper lays an important foundation for an understanding of the effects of these policy initiatives. Using data from a nationwide survey, this exit decision is examined using an innovative empirical strategy that combines Data Envelopment Analysis with a discrete choice econometric model. Results indicate that less efficient firms and those located in areas where land subsidence is severe are more likely to exit. These relationships may in part reflect the effectiveness of the recent policy changes to reduce land subsidence attributable to aquaculture production.

Suggested Citation

  • Chang, Hung-Hao & Boisvert, Richard N. & Hung, Ling-Yi, 2010. "Land subsidence, production efficiency, and the decision of aquacultural firms in Taiwan to discontinue production," Ecological Economics, Elsevier, vol. 69(12), pages 2448-2456, October.
    • Handle: RePEc:eee:ecolec:v:69:y:2010:i:12:p:2448-2456
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    1. Ahmed, Nesar & Zander, Kerstin K. & Garnett, Stephen T., 2011. "Socioeconomic aspects of rice-fish farming in Bangladesh: opportunities, challenges and production efficiency," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(2), pages 1-21.
    2. Tzong-Haw Lee & Song-Yue Liu & Chiou-Lien Huang & Hung-Hao Chang & Jiun-Hao Wang, 2023. "Can Direct Marketing Increase Fishery Profitability and Environmental Quality? Empirical Evidence of Aquaculture Farm Households in Taiwan," Agriculture, MDPI, vol. 13(6), pages 1-15, June.
    3. Maria Bonaventura Forleo & Luca Romagnoli & Nadia Palmieri & Angela Di Nocera, 2018. "Assessing the efficiency of aquaculture cooperatives. A country case study," Economia agro-alimentare, FrancoAngeli Editore, vol. 20(2), pages 205-220.
    4. Jimi, Nusrat A & Kumbhakar, Subal & Nikolov, Plamen V & Malek, Mohammad Abdul, 2016. "Does Credit Access Improve Firm Output? Evidence from a Field Experiment in Bangladesh," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236230, Agricultural and Applied Economics Association.

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