|Abstract or Summary
- We measured the impact that sanitary treatments aiming to reduce the abundance of sea lice Caligus rogercresseyi have on the unit production costs of Atlantic salmon fattening centers in southern Chile. We make use of a unique data set that allows us to follow complete production cycles for a sample of centers between 2009 and 2015. We estimate a salmon biomass growth and a sea lice determination model, which later are complemented with outside cost information on treatments, such as bath treatment costs, medication costs, and operational costs associated with the treatments. In this setting, we control for endogeneity bias and truncation in the sea lice data. The statistical analysis determines the effect of different treatments on the salmon growth profile. The model also allows identifying the effect that factors such as center location, environmental conditions, sea lice abundance in the area, have on salmon growth. We simulate how unit production costs vary with different treatments and center characteristics, and estimate the impact of treatments costs on unit production costs. Our results indicate that lice generate an important increase in unit costs, basically because its negative impact on the salmon production cycle and that sea lice treatments in the form of chemical baths, although expensive, do reduce unit production costs. However, the cost effect of treatments is positive and significant as compared with a scenario without sea lice.