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Price transmission in the Spanish bovine sector: the BSE effect
Author(s) -
Hassouneh Islam,
Serra Teresa,
Gil José M.
Publication year - 2010
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/j.1574-0862.2009.00423.x
Subject(s) - bovine spongiform encephalopathy , transmission (telecommunications) , economics , index (typography) , outbreak , error correction model , affect (linguistics) , food safety , business , econometrics , agricultural science , monetary economics , prion protein , biology , food science , cointegration , virology , disease , telecommunications , medicine , computer science , linguistics , philosophy , pathology , world wide web
A regime‐switching vector error correction model is applied to monthly price data to assess the impact of Bovine Spongiform Encephalopathy (BSE) outbreaks on price relationships and patterns of transmission among farm and retail markets for bovines in Spain. To evaluate the degree to which price transmission is affected by BSE food scares, a BSE food scare index is developed and used to determine regime switching. Results suggest that BSE scares affect beef producers and retailers differently. Consumer prices are found to be weakly exogenous and not found to react to BSE scares, while producer prices are conversely adjusted. The magnitude of the adjustment is found to depend on the magnitude of the BSE scare.