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Stock Price Reaction to Regulation in the Meat Packing Industry


  • Johnson, Mark S.
  • Mittelhammer, Ronald C.
  • Blayney, Donald P.


The results of this study suggest that a variety of regulations in the meat packing industry had significant, and sometimes unexpected, effects. The specific results of regulatory event testing show that many regulatory changes produce large significant impacts on the meat processing industry, in this study shown to be as large as 4% of shareholder wealth for a single informational event. The effects of each specific regulatory change on shareholders is dependent upon the type of regulation examined. These large impacts on the wealth of shareholders indicate that regulatory agencies and the regulations they create often serve the industry, as well as consumers. Finally, in this paper a refined Capital Asset Pricing Model (CAPM) analysis that adjusts for an errors-in-variables problem arising due to nonsynchronous trading is utilized which may be useful in future event studies relating to the agricultural sector.

Suggested Citation

  • Johnson, Mark S. & Mittelhammer, Ronald C. & Blayney, Donald P., 1994. "Stock Price Reaction to Regulation in the Meat Packing Industry," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, issue 3.
  • Handle: RePEc:ags:uersja:137417

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    References listed on IDEAS

    1. Wolff, Christian C P, 1987. "Time-Varying Parameters and the Out-of-Sample Forecasting Performance of Structural Exchange Rate Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 5(1), pages 87-97, January.
    2. Roger K. Conway & Charles B. Hallahan & Richard P. Stillman & Paul T. Prentice, 1990. "Forecasting livestock prices: Fixed and stochastic coefficients estimation comparisons," Agribusiness, John Wiley & Sons, Ltd., vol. 6(1), pages 15-32.
    3. P.A.V.B. Swamy & Roger K. Conway & Peter von zur Muehlen, 1984. "The foundations of econometrics: are there any?," Special Studies Papers 182, Board of Governors of the Federal Reserve System (U.S.).
    4. Chow, Gregory C., 1984. "Random and changing coefficient models," Handbook of Econometrics,in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 21, pages 1213-1245 Elsevier.
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    Cited by:

    1. Pritchett, James G. & Thilmany, Dawn D. & Johnson, Kamina K., 2005. "Animal Disease Economic Impacts: A Survey of Literature and Typology of Research Approaches," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 8(01).


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