IDEAS home Printed from https://ideas.repec.org/a/eee/jfpoli/v37y2012i3p264-274.html
   My bibliography  Save this article

Food scare crises and developing countries: The impact of avian influenza on vertical price transmission in the Egyptian poultry sector

Author

Listed:
  • Hassouneh, Islam
  • Radwan, Amr
  • Serra, Teresa
  • Gil, José M.

Abstract

A bivariate smooth transition vector error correction model is applied to monthly poultry price data to analyze the effects that avian influenza has had on price transmission along the Egyptian poultry marketing chain. In order to reflect consumer awareness of the crisis, an avian influenza food scare information index is developed and used within the model as a transition variable. Our results suggest that price adjustments to deviations from the market equilibrium parity depend on the magnitude of the avian influenza crisis. Further these adjustments are found to have very different implications for market equilibrium: during the crisis retailers use their market power to increase marketing margins. In contrast, wholesaler margins are found to decline. Results also suggest that food safety information indices contribute to understanding the economic effects of food scare crises in developing countries.

Suggested Citation

  • Hassouneh, Islam & Radwan, Amr & Serra, Teresa & Gil, José M., 2012. "Food scare crises and developing countries: The impact of avian influenza on vertical price transmission in the Egyptian poultry sector," Food Policy, Elsevier, vol. 37(3), pages 264-274.
  • Handle: RePEc:eee:jfpoli:v:37:y:2012:i:3:p:264-274
    DOI: 10.1016/j.foodpol.2012.02.012
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306919212000164
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Dick van Dijk & Timo Terasvirta & Philip Hans Franses, 2002. "Smooth Transition Autoregressive Models — A Survey Of Recent Developments," Econometric Reviews, Taylor & Francis Journals, vol. 21(1), pages 1-47.
    2. Barry K. Goodwin & Matthew T. Holt, 1999. "Price Transmission and Asymmetric Adjustment in the U.S. Beef Sector," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 630-637.
    3. Mario Mazzocchi, 2006. "No News Is Good News: Stochastic Parameters versus Media Coverage Indices in Demand Models after Food Scares," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(3), pages 727-741.
    4. Islam Hassouneh & Teresa Serra & José M. Gil, 2010. "Price transmission in the Spanish bovine sector: the BSE effect," Agricultural Economics, International Association of Agricultural Economists, vol. 41(1), pages 33-42, January.
    5. Jean-Paul Chavas & Aashish Mehta, 2004. "Price Dynamics in a Vertical Sector: The Case of Butter," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(4), pages 1078-1093.
    6. Henrik Hansen & Søren Johansen, 1999. "Some tests for parameter constancy in cointegrated VAR-models," Econometrics Journal, Royal Economic Society, vol. 2(2), pages 306-333.
    7. Obstfeld, Maurice & Taylor, Alan M., 1997. "Nonlinear Aspects of Goods-Market Arbitrage and Adjustment: Heckscher's Commodity Points Revisited," Journal of the Japanese and International Economies, Elsevier, vol. 11(4), pages 441-479, December.
    8. Teresa Serra & José M. Gil & Barry K. Goodwin, 2006. "Local polynomial fitting and spatial price relationships: price transmission in EU pork markets," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 33(3), pages 415-436, September.
    9. Sam Peltzman, 2000. "Prices Rise Faster than They Fall," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 466-502, June.
    10. Goodwin, Barry K. & Harper, Daniel C., 2000. "Price Transmission, Threshold Behavior, And Asymmetric Adjustment In The U.S. Pork Sector," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 32(3), pages 1-11, December.
    11. Elif Akben & Gökhan Özertan & Aslýhan D. Spaulding & Sayed H. Saghaian, 2008. "Consumer responses to the H5N1 Avian Influenza: the case of Turkey," Economics Bulletin, AccessEcon, vol. 4(15), pages 1-9.
    12. Brown, Scott & Madison, Daniel & Goodwin, H.L. & Clark, F. Dustan, 2007. "The Potential Effects on United States Agriculture of an Avian Influenza Outbreak," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 39(2), pages 335-343, August.
    13. Serra, Teresa, 2011. "Food scare crises and price volatility: The case of the BSE in Spain," Food Policy, Elsevier, vol. 36(2), pages 179-185, April.
    14. Barry K. Goodwin & Nicholas E. Piggott, 2001. "Spatial Market Integration in the Presence of Threshold Effects," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(2), pages 302-317.
    15. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    16. Bénédicte Vidaillet & V. d'Estaintot & P. Abécassis, 2005. "Introduction," Post-Print hal-00287137, HAL.
    17. Teresa Serra & Barry K. Goodwin, 2004. "Regional Integration of Nineteenth Century U.S. Egg Markets," Journal of Agricultural Economics, Wiley Blackwell, vol. 55(1), pages 59-74, March.
    18. Verbeke, Wim & Ward, Ronald W., 2001. "A fresh meat almost ideal demand system incorporating negative TV press and advertising impact," Agricultural Economics, Blackwell, vol. 25(2-3), pages 359-374, September.
    19. Perron, Pierre, 1997. "Further evidence on breaking trend functions in macroeconomic variables," Journal of Econometrics, Elsevier, vol. 80(2), pages 355-385, October.
    20. Teresa Serra & Barry Goodwin, 2003. "Price transmission and asymmetric adjustment in the Spanish dairy sector," Applied Economics, Taylor & Francis Journals, vol. 35(18), pages 1889-1899.
    21. Saghaian, Sayed H. & Ozertan, Gokhan & Spaulding, Aslihan D., 2008. "Dynamics of Price Transmission in the Presence of a Major Food Safety Shock: Impact of H5N1 Avian Influenza on the Turkish Poultry Sector," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 40(3), pages 1-17, December.
    22. Beach, Robert H. & Kuchler, Fred & Leibtag, Ephraim S. & Zhen, Chen, 2008. "The Effects of Avian Influenza News on Consumer Purchasing Behavior: A Case Study of Italian Consumers' Retail Purchases," Economic Research Report 56477, United States Department of Agriculture, Economic Research Service.
    23. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    24. Lloyd, Tim & McCorriston, S. & Morgan, C. W. & Rayner, A. J., 2001. "The impact of food scares on price adjustment in the UK beef market," Agricultural Economics, Blackwell, vol. 25(2-3), pages 347-357, September.
    25. Brown, Scott & Madison, Daniel & Goodwin, Harold L., Jr. & Clark, F. Dustan, 2007. "The Potential Effects on United States Agriculture of an Avian Influenza Outbreak," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 39(2), pages 1-9, August.
    26. M. Ben-Kaabia & José M. Gil, 2007. "Asymmetric price transmission in the Spanish lamb sector," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 34(1), pages 53-80, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    RePEc Biblio mentions

    As found on the RePEc Biblio, the curated bibliography for Economics:
    1. > Economics of Welfare > Health Economics > Economics of Pandemics > Specific pandemics > Avian Influenza (H5N1)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lan Yi & Jianping Tao & Caifeng Tan & Zhongkun Zhu, 2019. "Avian Influenza, Public Opinion, and Risk Spillover: Measurement, Theory, and Evidence from China’s Broiler Market," Sustainability, MDPI, Open Access Journal, vol. 11(8), pages 1-44, April.
    2. Alejandro Acosta & Carlos Barrantes & Rico Ihle, 2020. "Animal disease outbreaks and food market price dynamics: Evidence from regime‐dependent modelling and connected scatterplots," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(3), pages 960-976, July.
    3. Zhou, Li & Turvey, Calum G. & Hu, Wuyang & Ying, Ruiyao, 2016. "Fear and trust: How risk perceptions of avian influenza affect Chinese consumers’ demand for chicken," China Economic Review, Elsevier, vol. 40(C), pages 91-104.
    4. Rieger, Jörg & Kuhlgatz, Christian & Anders, Sven, 2016. "Food scandals, media attention and habit persistence among desensitised meat consumers," Food Policy, Elsevier, vol. 64(C), pages 82-92.
    5. Aysoy, Cevriye & Kirli, Duygu Halim & Tumen, Semih, 2015. "How does a shorter supply chain affect pricing of fresh food? Evidence from a natural experiment," Food Policy, Elsevier, vol. 57(C), pages 104-113.
    6. Jarilkasin Ilyasov & Linde Götz & Kamiljon Akramov & Paul Dorosh & Thomas Glauben, 2016. "Market Integration and Price Transmission in Tajikistan’s Wheat Markets: Rising Like Rockets but Falling Like Feathers?," Working Papers id:11177, eSocialSciences.
    7. Liwen Ling & Dabin Zhang & Shanying Chen & Amin W. Mugera, 2020. "Can online search data improve the forecast accuracy of pork price in China?," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 39(4), pages 671-686, July.
    8. Hoffmann, Vivian & Moser, Christine & Saak, Alexander, 2019. "Food safety in low and middle-income countries: The evidence through an economic lens," World Development, Elsevier, vol. 123(C), pages 1-1.
    9. Popovic, Rade & Radovanov, Boris & Dunn, James W., 2016. "Food scare crisis: the effect on Serbian dairy market," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 20(1), October.
    10. David, S.A. & Inácio Jr., C.M.C. & Tenreiro Machado, José A., 2021. "The recovery of global stock markets indices after impacts due to pandemics," Research in International Business and Finance, Elsevier, vol. 55(C).
    11. Ilyasov, Jarilkasin & Goetz, Linde & Akramov, Kamiljon & Dorosh, Paul & Glauben, Thomas, 2015. "Market Integration and PRice Transmission in Tajikistan's Wheat Markets" Rising like rockets but falling like feathers?," 2015 Conference, August 9-14, 2015, Milan, Italy 211786, International Association of Agricultural Economists.
    12. Zhou, Li & Turvey, Calum & Hu, Wuyang & Ying, Ruiyao, 2015. "Fear and Trust: How Risk Perceptions of Avian Influenza Affect the Demand for Chicken," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 202077, Agricultural and Applied Economics Association.
    13. T. S. Amjath-Babu & Timothy J. Krupnik & Shakuntala H. Thilsted & Andrew J. McDonald, 2020. "Key indicators for monitoring food system disruptions caused by the COVID-19 pandemic: Insights from Bangladesh towards effective response," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 12(4), pages 761-768, August.
    14. Jose‐Maria Garcia‐Alvarez‐Coque & Ibtissem Taghouti & Victor Martinez‐Gomez, 2020. "Changes in Aflatoxin Standards: Implications for EU Border Controls of Nut Imports," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(3), pages 524-541, September.
    15. Seok, Jun Ho & Kim, GwanSeon & Reed, Michael R. & Kim, Soo-Eun, 2018. "The impact of avian influenza on the Korean egg market: Who benefited?," Journal of Policy Modeling, Elsevier, vol. 40(1), pages 151-165.
    16. T. S. Amjath-Babu & Timothy J. Krupnik & Shakuntala H. Thilsted & Andrew J. McDonald, 0. "Key indicators for monitoring food system disruptions caused by the COVID-19 pandemic: Insights from Bangladesh towards effective response," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 0, pages 1-8.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Islam Hassouneh & Teresa Serra & José M. Gil, 2010. "Price transmission in the Spanish bovine sector: the BSE effect," Agricultural Economics, International Association of Agricultural Economists, vol. 41(1), pages 33-42, January.
    2. Amer Ait Sidhoum & Teresa Serra, 2016. "Volatility Spillovers in the Spanish Food Marketing Chain: The Case of Tomato," Agribusiness, John Wiley & Sons, Ltd., vol. 32(1), pages 45-63, January.
    3. Karikallio, Hanna, 2015. "Cross-commodity Price Transmission and Integration of the EU Livestock Market of Pork and Beef: Panel Time-series Approach," 2015 Conference, August 9-14, 2015, Milan, Italy 211832, International Association of Agricultural Economists.
    4. Irz, Xavier & Mazzocchi, Mario & Réquillart, Vincent & Soler, Louis-Georges, 2015. "Research in Food Economics: past trends and new challenges," Revue d'Etudes en Agriculture et Environnement, Editions NecPlus, vol. 96(01), pages 187-237, March.
    5. Badolo, Félix, 2012. "Chocs de prix internationaux et transmission : cas du marché du riz au Burkina Faso," L'Actualité Economique, Société Canadienne de Science Economique, vol. 88(3), pages 317-346, Septembre.
    6. Mohammad J Alam & Raghbendra Jha, 2016. "Asymmetric threshold vertical price transmission in wheat and flour markets in Dhaka (Bangladesh): seemingly unrelated regression analysis," ASARC Working Papers 2016-03, The Australian National University, Australia South Asia Research Centre.
    7. Keho, Yaya & Camara, Aïssata Sobia, 2012. "Vertical Price Transmission in Local Rice Markets in Côte d’Ivoire: Are Consumers Really Right?," Asian Journal of Agriculture and Rural Development, Asian Economic and Social Society (AESS), vol. 2(04), pages 1-13, December.
    8. Hassouneh, Islam & Serra, Teresa & Gil, Jose Maria, 2011. "Non-parametric and Parametric Modeling of Biodiesel - Sunflower Oil - Crude Oil Price Relationships," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114554, European Association of Agricultural Economists.
    9. Koutroumanidis, Theodoros & Zafeiriou, Eleni & Arabatzis, Garyfallos, 2009. "Asymmetry in price transmission between the producer and the consumer prices in the wood sector and the role of imports: The case of Greece," Forest Policy and Economics, Elsevier, vol. 11(1), pages 56-64, January.
    10. El Benni, Nadja & Finger, Robert & Hediger, Werner, 2014. "Transmission of beef and veal prices in different marketing channels," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182696, European Association of Agricultural Economists.
    11. Ihle, Rico & von Cramon-Taubadel, Stephan, 2008. "A Comparison of Threshold Cointegration and Markov-Switching Vector Error Correction Models in Price Transmission Analysis," 2008 Conference, April 21-22, 2008, St. Louis, Missouri 37603, NCCC-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    12. Seval Mutlu Çamoğlu & Teresa Serra & Jos頍. Gil, 2015. "Vertical price transmission in the Turkish poultry market: the avian influenza crisis," Applied Economics, Taylor & Francis Journals, vol. 47(11), pages 1106-1117, March.
    13. Fousekis, Panos & Katrakilidis, Constantinos & Trachanas, Emmanouil, 2016. "Vertical price transmission in the US beef sector: Evidence from the nonlinear ARDL model," Economic Modelling, Elsevier, vol. 52(PB), pages 499-506.
    14. Kanjilal, Kakali & Ghosh, Sajal, 2017. "Dynamics of crude oil and gold price post 2008 global financial crisis – New evidence from threshold vector error-correction model," Resources Policy, Elsevier, vol. 52(C), pages 358-365.
    15. Abdelradi, Fadi & Serra, Teresa, 2015. "Food–energy nexus in Europe: Price volatility approach," Energy Economics, Elsevier, vol. 48(C), pages 157-167.
    16. Subervie, Julie, 2011. "Producer price adjustment to commodity price shocks: An application of threshold cointegration," Economic Modelling, Elsevier, vol. 28(5), pages 2239-2246, September.
    17. Rezitis, Anthony N. & Tsionas, Mike, 2019. "Modeling asymmetric price transmission in the European food market," Economic Modelling, Elsevier, vol. 76(C), pages 216-230.
    18. Monia Ben-Kaabia & José M. Gil & Mehrez Ameur, 2005. "Vertical integration and non-linear price adjustments: The Spanish poultry sector," Agribusiness, John Wiley & Sons, Ltd., vol. 21(2), pages 253-271.
    19. Teresa Serra & Barry Goodwin, 2003. "Price transmission and asymmetric adjustment in the Spanish dairy sector," Applied Economics, Taylor & Francis Journals, vol. 35(18), pages 1889-1899.
    20. Serra, Teresa, 2011. "Food scare crises and price volatility: The case of the BSE in Spain," Food Policy, Elsevier, vol. 36(2), pages 179-185, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jfpoli:v:37:y:2012:i:3:p:264-274. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Haili He). General contact details of provider: http://www.elsevier.com/locate/foodpol .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.