Economic performance of fish farms: an analysis by the profit function of fish farmers in Republic of Benin

Abstract

This study investigates the economic performance of different types of fish farms in Benin, using the profit function approach to avoid the simultaneous equation bias associated with production functions. Data was collected from 649 fish farmers on input and output prices, production factors, and socio-economic characteristics. The Translog specification of the normalized profit function was estimated using Zellner's SURE method. The results suggest that the profit of fish farmers of different farm types is influenced by the price of the variable inputs they use. Fingerlings are the most limiting factor in fish production, given their indirect elasticity on production. The implications of the findings suggest that the profit of different types of fish farms can be improved by enhancing the ability of fish farmers to manage variable and fixed costs to maximise profits. Additionally, research should develop an innovative strategy to make fingerlings and feeds more available and accessible to fish farmers.

Keywords: Profit, type of fish farmer, demand for inputs, elasticities