Forecasting Supply and Demand for Farmed Abalone in Korea: A Simultaneous Model Approach

Despite the rapid growth of Korea’s abalone aquaculture industry, stagnant domestic demand has led to persistent oversupply, placing downward pressure on prices and underscoring the need for effective supply-demand forecasting. In response to increasing mortality risks, farmers have shortened the grow-out period, inadvertently exacerbating the oversupply problem. This study develops a simultaneous equation model to capture the dynamic interactions between abalone supply and demand. To address potential structural changes in the time-series data, multiple breakpoint tests were conducted. Most variables in the behavioral equations were statistically significant at the 1% level. However, the coefficient for shipment volume in the grow-out stock equation for abalone over one year was not statistically significant, although it remained economically plausible. The model incorporates both in-sample and out-of-sample forecast evaluations, along with a policy simulation module to enhance practical applicability. Except for export-related equations, the model exhibits strong predictive accuracy. These results suggest that the proposed framework is a valuable tool for forecasting and policy planning in Korea’s abalone industry.