The dynamic impacts of disease outbreak on vertical and spatial markets: the case of African Swine Fever in China. Issue 18 (15th April 2023)

• Record Type: Journal Article
• Authors: Wang, Linjie; Chavas, Jean-Paul; Li, Jian
• Is Part Of: Applied economics. Volume 55:Issue 18(2023)
• Page Start: 2005
• Page End: 2023
• Publication Date: 2023-04-15
• Subjects: Market integration -- vertical pricing -- spatial pricing -- cycles -- African Swine fever; C32 -- Q11; Economics -- Periodicals; 330
• DOI: 10.1080/00036846.2022.2101605
• Languages: English
• ISSNs: 0003-6846

Abstract

ABSTRACT: This paper investigates the dynamic effects of a disease outbreak on vertical and spatial markets, with an application to the African Swine Fever (ASF) and its impact on Chinese hog markets. Relying on a flexible representation of vertical and spatial price dynamics, we investigate how ASF affected the pork cycle and price transmission across markets. We find that the ASF outbreak had larger long-term effects on spatial prices than on vertical prices, likely reflecting inter-regional trade bans imposed by the government. Our analysis indicates that ASF contributed to shortening the period of the pork cycle. We also provide evidence that the ASF outbreak affected cointegration relations across markets, especially among regional markets.