The salmonid aquaculture industry is facing significant environmental and biological challenges, limiting the industry’s ability to grow. One of the most critical challenges is the prevalence of sea lice. Parasitic sea lice negatively affect the biological growth rate of farm biomass and, as such, contribute to loss of revenues and lowered fish welfare. As a result of this, the utilization of chemical and mechanical delousing are popular measures used to combat lice infestations. For some time, there has been a suspicion that such measures adversely impact the biological growth rate of farmed salmonids. This study is the first of its kind to investigate this suspicion in detail. The main objective of this study is to provide an updated estimation of the industry-wide costs related to lice, while simultaneously measuring the effect of lice treatment on biological growth rate. The analysis performed in this thesis is enabled through the utilization of a rich data set containing information on biophysical variables, lice counts, and treatment applications for all Norwegian farms in the period from 2012 to 2017. Using this data set, we empirically investigate the biological and economic impacts of observed levels of sea lice and their associated mitigation efforts. Our results suggest that lice treatments negatively affect biological growth rate and contribute to a higher loss of revenue compared to sea lice alone. From our marginal effects estimation, both bath and mechanical treatments reduce growth rate. Bath treatments reduce growth rate between 0.92% to 1.21%, while mechanical treatments reduce the growth rate between 1.73% to 2.14%, depending on geographical location. Additionally, our analysis shows that the total cost of lice is equivalent to 14.21% of revenues or 7.63 NOK per kg produced fish, which corresponds to an industry-wide cost of 11.2 billion NOK in 2017.

Master's thesis in Industrial economics