Reefers Unite! Analyzing Coral Prices to Incentivize Land-Based Coral Aquaculture

Abstract

The marine reefkeeping hobby has been instrumental in advancing our understanding of natural coral reefs. Due to technological advances and the internet, maintaining a thriving reef ecosystem in one’s home has never been easier. The information learned and disseminated from these hobbyists have allowed numerous breakthroughs in the aquaculture of corals, such as the captive spawning of corals. Since keeping corals in captivity is easier now than ever before, more people have entered the hobby and have driven up the demand for corals to stock their aquariums. This raises questions about the sustainability and environmental impact of the hobby. However, with this increase in demand, coral suppliers have begun to aquaculture corals instead of relying on wild-harvested corals. This pressure to supply viable corals through the process of aquaculture has created a niche market for “designer” coral which garner a significantly higher price due to their lower mortality rates and exceptional coloration. The valuation of corals varies greatly and can become multiplied even greater if the corals become aquacultured. The pricing of corals exhibits a high level of variance even for identical corals due to the conditions they are grown under and the market clout of the seller. Other key factors also contribute to the overall valuation of corals in the aquarium trade. This thesis aims to analyze the seemingly arbitrary market pricing of corals through factor analysis and regression techniques to promote land-based aquaculture.