Abstract
Land subsidence attributable to the overuse of groundwater has resulted in severe damage in both urban and rural areas and in developed and developing countries. By incorporating the externality of groundwater use in aquacultural farming, we analyse how the government can mitigate the land subsidence levels without reducing the farmers' profits, by both reusing the retired aquacultural land and through adjustments in the locations of the species currently being farmed in Tong-shi Township, Taiwan. The simulation results indicate that if the species with high profit can be sustainably raised and moved to aquacultural lands that are less sensitive to groundwater extraction, the total profit could exceed that without the regulation. © 2013 Copyright Taylor and Francis Group, LLC.