World Scientific
  • Search
Skip main navigation

Cookies Notification

We use cookies on this site to enhance your user experience. By continuing to browse the site, you consent to the use of our cookies. Learn More
Our website is made possible by displaying certain online content using javascript.
In order to view the full content, please disable your ad blocker or whitelist our website

System Upgrade on Tue, Oct 25th, 2022 at 2am (EDT)

Existing users will be able to log into the site and access content. However, E-commerce and registration of new users may not be available for up to 12 hours.
For online purchase, please visit us again. Contact us at [email protected] for any enquiries.

Disease Risk and Market Structure in Salmon Aquaculture

    We develop a model of a multi-national firm producing commodities for a global market in multiple locations with location-specific risks and different regulatory standards. Salmon aquaculture and disease outbreaks provide an empirically relevant example. We specifically examine details of the infectious salmon anemia outbreak in Chile in the late 2000s, the multi-national nature of some firms operating in Chile, and the overall market structure of the salmon farming industry as motivation for our theoretical model. In the model, market structure and the regulatory environments in multiple countries interact to influence how intensively firms use aquatic ecosystems. Downward-sloping market demand can lead to a perverse outcome in which high environmental standards in one country both lower the provision of disease management in the other country and reduce industry-wide output. We extend this model to consider additional locations, types of firms, and within-location risk spillovers. We find that the risk of outbreak in a given location is decreasing with greater firm concentration within the location, increasing with the outside production of operators within the location, and increasing with lower risk (or more regulation) in other locations where the operators produce. We suggest other applications of multi-national risk management.


    • Abolofia, JN (2014). The bioeconomics of a common property pest: Parasitic sea lice and farmed salmonids. Unpublished doctoral dissertation, University of California, Davis. Google Scholar
    • Anderson JL [2002] Aquaculture and the future: Why fisheries economists should care. Marine Resource Economics, 17, 133–151. CrossrefGoogle Scholar
    • Asche F [2008] Farming the sea, Marine Resource Economics 23, 527–547. CrossrefGoogle Scholar
    • Asche F, Guttormsen AG and Tveterås R [1999] Environmental problems, productivity and innovations in Norwegian salmon aquaculture, Aquaculture Economics and Management 3 (1), 19–29. CrossrefGoogle Scholar
    • Asche F, Hansen H, Tveteras R and Tveteras S [2010] The salmon disease crisis in Chile, Marine Resource Economics 24 (4). CrossrefGoogle Scholar
    • Asche F, Roll KH, Sandvold HN, Sørvig A and Zhang D [2013] Salmon aquaculture: Larger companies and increased production, Aquaculture Economics & Management 17 (3), 322–339. CrossrefGoogle Scholar
    • Asche F, Bellemare MF, Roheim C, Smith MD and Tveteras S [2015a] Fair enough? Food security and the international trade of seafood. World Development 67, 151–160. CrossrefGoogle Scholar
    • Asche F, Larsen TA, Smith MD, Sogn-Grundvåg G and Young JA [2015b] Pricing of eco-labels with retailer heterogeneity. Food Policy 53, 82–93. CrossrefGoogle Scholar
    • Asche F, Roheim CA and Smith MD [2015c] Trade intervention: Not a silver bullet to address environmental externalities in global aquaculture, Marine Policy (in press). doi: 10.1016/j.morpol.2015.06.021. Google Scholar
    • Barrett S [1994] Strategic environmental policy and international trade, Journal of Public Economics 54 (3), 325–338. CrossrefGoogle Scholar
    • Buchanan JM [1969] External diseconomies, corrective taxes, and market structure, American Economic Review 59 (1), 174–177. Google Scholar
    • Conrad J and Rondeau D [2015] Bioeconomics of marine disease, Marine Resource Economics 30 (4), 393–416. CrossrefGoogle Scholar
    • Cook, R (2014). Trends in the Marketing of Fresh Produce and Fresh-Cut/Value-Added Produce. Davis, CA: University of California, Davis, online presentation, Available at: 140620.pdf. Google Scholar
    • DeVoretz DJ and Salvanes KG [1993] Market structure for farmed salmon, American Journal of Agricultural Economics 75 (1), 227–233. CrossrefGoogle Scholar
    • FAO, State of World Fisheries and Aquaculture (Food and Agriculture Organization of the United Nations, Rome, 2014). Google Scholar
    • Fofana A and Jaffry S [2008] Measuring oligopsony power of UK salmon retailers, Marine Resource Economics 485–506. CrossrefGoogle Scholar
    • Intrafish (2009). World’s 30 biggest salmon producers in 2009. Industry report. Google Scholar
    • Jaffry S, Fofana A and Murray AD [2003] Testing for market power in the UK salmon retail sector, Aquaculture Economics and Management 7, 293–308. CrossrefGoogle Scholar
    • Naylor RL, Goldburg RJ, Primavera JH, Kautsky N, Beveridge MD et al. [2000] Effect of aquaculture on world fish supplies. Nature 405, 1017–1024. CrossrefGoogle Scholar
    • Smith MD, Asche F, Guttormsen AG and Wiener JB [2010a] Genetically modified salmon and full impact assessment. Science 330, 1052–1053. CrossrefGoogle Scholar
    • Smith MD, Roheim CA, Crowder LB, Halpern BS, Turnipseed M, Anderson JL, Asche F, Bourillón L, Guttormsen AG, Khan A, Liguori LA, McNevin A, O’Connor MI, Squires D, Tyedmers P, Brownstein C, Carden K, Klinger DH, Sagarin R and Selkoe KA [2010b] Sustainability and global seafood. Science 327, 784–786. CrossrefGoogle Scholar
    • Steen F and Salvanes KG [1999] Testing for market power using a dynamic oligopoly model, International Journal of Industrial Organization 17 (2), 147–177. CrossrefGoogle Scholar
    • Tacon AGJ and Metian M [2008] Global overview on the use of fish meal and fish oil in industrially compounded aquafeeds: Trends and future prospects. Aquaculture 285, 146–158. CrossrefGoogle Scholar
    • Thorud, K and T Håstein (2003). Experiences with regulatory responses to infectious salmon anemia in Norway. In International Response to Infectious Salmon Anemia: Prevention, Control, and Eradication: Proceedings of a Symposium, O Miller and RC Cipriano (eds.), pp. 155–159. 3–4 September 2002, New Orleans, LA. Tech.Bull.No.1902. Washington, D.C.: U.S. Department of Agriculture, Animal and Plant Health Inspection Service; U.S. Department of the Interior; U.S. Geological Survey; U.S. Department of Commerce, National Marine Fisheries Service. Google Scholar
    • Tirole J [1988] The Theory of Industrial Organization. Cambridge, MA: MIT Press. Google Scholar
    • Valderrama D and Anderson JL [2010] Market interactions between aquaculture and common-property fisheries: Recent evidence from the Bristol Bay sockeye salmon fishery in Alaska, Journal of Environmental Economics and Management 59 (2), 115–128. CrossrefGoogle Scholar
    • Vike, S (2014). Infectious salmon anaemia in Atlantic salmon, Salmo salar L. in Chile: Transmission routes and prevention. Unpublished doctoral dissertation, University of Bergen, Norway. Google Scholar
    • Vike S, Nylund S and Nylund A [2009] ISA virus in Chile: Evidence of vertical transmission, Archives of Virology 154 (1), 1–8. CrossrefGoogle Scholar
    • Xie J and Zhang D [2014] Imperfect competition and structural changes in the US salmon import market, Marine Resource Economics 29 (4), 375–389. CrossrefGoogle Scholar
    • Xie J, Kinnucan HW and Myrland Ø [2009] Demand elasticities for farmed salmon in world trade, European Review of Agricultural Economics 36 (3), 425–445. CrossrefGoogle Scholar