A Business Analysis of Innovations in Aquaculture: Evidence from Israeli Sturgeon Caviar Farm

Abstract

The background of this study is related to the tendencies in caviar production and prices in the world. The objective of the study is to evaluate and compare the profitability of different sturgeon sex determination methods for the conditions of aquaculture farms in northern Israel. We present the economic valuation of the technological innovation of early sex determination in this aquaculture industry. The production of sturgeon biomass exceeded the fishery harvest during the 1970–1980s by more than four times. There was a significant decline in world caviar prices the last time. The aquafarming business has a high potential economic value in the region of northern Israel. Based on the empirical data of the Caviar Galilee farm in this region, we examine the economic benefits of the innovation in sturgeon sex determination, including the case of a possible decrease in caviar price. Using the bio-economic model for a sturgeon caviar farm in two versions (for each of the considered sex determination methods, the endoscopy method and the early sex determination method), we show the economic advantages of this innovation of 9–34% for different financial highlights compared to the traditional method of sturgeon sex determination. The study empirically illustrates the economic advantages of the cooperation between aquaculture farming and research institutes. Our study suggests that additional directions in research should be sought in order to increase the profitability of sturgeon farms, especially when the world caviar prices decline. Further research can be conducted for additional regions and data.