The Mekong Delta in Vietnam has become an important production area for pangasius. The importance of the sector in providing an income to many households means that it is relevant to study its economic production characteristics. In this article we use a stochastic cost frontier model to assess the adaptability of the sector. We are particularly interested in the effect of the changing market environment and the exponential growth of the sector on the evolution of production characteristics. We compare data from 2002 with 2006 data. The results show that pangasius farming became more efficient by 2006, with higher returns to scale. We discuss the possible policy implications of our findings.

JEL Classification Codes: Q12, Q22