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This study analyzed the effects of price changes on the annual costs and returns of 162 oyster farmers in Changhua County, Taiwan, who cultivate oysters at two levels of density: low and high. Specifically, it used the translog profit function to evaluate the effects of changes in oyster prices on output supply and the demand of various inputs at the two densities of oyster cultivation. The study found that high-density farmers generate more profit than low-density farmers because they experience lower average costs. The results of the output supply elasticity with respect to input prices indicate that wages and other miscellaneous prices are the two main factors that negatively and more significantly affect the production of low- and high-stocking-density farmers. Own price elasticity of other miscellaneous input (−1.814), labor input (−1.805), seed input (−1.682), and input of capital (−1.58) was more responsive to price changes for high-density farmers than for low-density farmers. This indicates that increases in input prices have a significant effect on reducing input demand for high-density farmers. The cross-price elasticities of the variable inputs labor- seed and labor- other miscellaneous are −0.648 and −0.649, respectively. These negative elasticities indicate that labor-seed and labor-other miscellaneous are complementary inputs, which suggests their combined application increases farm production synergistically for low-density farmers. [ABSTRACT FROM AUTHOR]

Because of the influence of an intertidal farming environment, the oyster breeding industry of Chiayi and Yunlin has adopted the use of a horizontal rack culture in the intertidal zone, as well as a raft-string culture, to increase oyster production. This study used the translog cost function to analyze and compare the horizontal rack culture and horizontal rack culture coupled with the raft-string culture, referred to as a mixed culture, to explore whether the two breeding methods demonstrated economies of scale and a relationship based on production input factor substitution. This study determined that both farming methods demonstrated increasing returns to scale. In addition, the mixed culture method yielded apparently higher returns to scale compared with the rack culture. The mixed culture was found to be more profitable than the horizontal rack culture because of higher production and lower average cost. Both farming methods exhibited an apparently significant substitution relationship regarding capital investment and juvenile oyster input, and capital investment and fishing gear, suggesting that increasing capital price leads to increased juvenile oyster and fishing gear input in substitution of the capital use. [ABSTRACT FROM AUTHOR]