Price transmission in the Spanish bovine sector: The BSE effect

Islam Hassouneh, Teresa Serra, José M. Gil

Research output: Contribution to journalArticlepeer-review

Abstract

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.

Original languageEnglish (US)
Pages (from-to)33-42
Number of pages10
JournalAgricultural Economics
Volume41
Issue number1
DOIs
StatePublished - Jan 2010
Externally publishedYes

Keywords

  • BSE crisis
  • Food scare
  • Price transmission
  • Regime-switching

ASJC Scopus subject areas

  • Agronomy and Crop Science
  • Economics and Econometrics

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