The eel farming industry of Taiwan is faced with rising production costs and strongcompetition with foreign producers.Thus,in this paper an empirical analysis of productioncosts and marketing models in the Taiwan eel industry is undertaken based on cross-section and time series data.Costs of production and processing were estimated fromthe survey data.An econometric model of the export market was constructed for theindustry.Special attention is paid to the export sector since over 90% of Taiwan's eelproduction,including live and processed eel,are exported to Japan.The market shareof Taiwan's eels in Japanese market has been declining.Research and developmentactivities to remove the industry's problems are needed in order to improve the economicviability of farming operations.The nature of the expansion of foreign eel industriesshould be investigated.