Assessment of Comparative Advantage in Aquaculture

Assessment of Comparative Advantage in Aquaculture Synopsis

Comparative advantage analysis is a useful tool of economics that can be used to compare relative costs of production and identify species and markets with the greatest likelihood of success. Two different approaches are normally used to assess comparative advantage: the Domestic Resource Cost (DRC) and the Revealed Comparative Advantage (RCA) methods. The DRC approach is dynamic but requires data which may be hard to obtain. The RCA method is more descriptive and has less predictive potential than the DRC approach but required data are normally available. This paper illustrates the concept of comparative advantage and some of its policy implications by presenting two case studies (on shrimp export markets and aquaculture production of freshwater finfish) using the RCA method.