Animal disease outbreaks and food market price dynamics: Evidence from regime‐dependent modelling and connected scatterplots. (27th July 2020)

• Record Type: Journal Article
• Authors: Acosta, Alejandro; Barrantes, Carlos; Ihle, Rico
• Is Part Of: Australian journal of agricultural and resource economics. Volume 64:Number 3(2020)
• Page Start: 960
• Page End: 976
• Publication Date: 2020-07-27
• Subjects: antitrust intervention -- highly pathogenic avian influenza -- market integration -- price transmission; Agriculture -- Economic aspects -- Periodicals; Agriculture -- Environmental aspects -- Periodicals; Natural resources -- Periodicals; Agriculture -- Economic aspects -- Australia -- Periodicals; Natural resources -- Australia -- Periodicals; 338.1
• DOI: 10.1111/1467-8489.12387
• Languages: English
• ISSNs: 1364-985X

Abstract

Abstract : The economic impacts of animal disease outbreaks have been widely discussed in the literature. Most authors have centred their attention on estimating the direct costs. Recent studies have shown that the indirect economic effects might lead to equal or even higher welfare losses. This study aims to contribute to this field of research by assessing the effect of an animal disease outbreak on food market price dynamics in Mexico, accounting for the potential effect of an antitrust intervention. We employ a regime‐dependent vector error correction model and a connected scatterplot analysis. The results show that both the outbreak and the antitrust intervention caused structural breaks in food market price dynamics between producers and consumers, reflected in an increase in the absolute component of the marketing margin, with serious food security implications.