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

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

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    File URL: http://www.sciencedirect.com/science/article/pii/S0306919212000164
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    Article provided by Elsevier in its journal Food Policy.

    Volume (Year): 37 (2012)
    Issue (Month): 3 ()
    Pages: 264-274

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    Handle: RePEc:eee:jfpoli:v:37:y:2012:i:3:p:264-274
    Contact details of provider: Web page: http://www.elsevier.com/locate/foodpol

    Keywords: Food scare; Avian influenza; Price transmission; STAR model; Egypt;

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    Cited by:

    1. Ilyasov, Jarilkasin & Götz, Linde & Akramov, Kamiljon T. & Dorosh, Paul A. & Glauben, Thomas, 2016. "Market integration and price transmission in Tajikistan’s wheat markets: Rising like rockets but falling like feathers?," IFPRI discussion papers 1547, International Food Policy Research Institute (IFPRI).
    2. 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.
    3. 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;Western Agricultural Economics Association.
    4. 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.

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