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Price transmission in the Spanish bovine sector: the BSE effect

  • Hassouneh, Islam
  • Serra, Teresa
  • Gil, Jose Maria
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    A regime-switching vector error correction model is applied to monthly price data to assess the impact of BSE outbreaks on price relationships and patterns of transmission among farm and retail markets for bovine 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 conversely adjusted. The magnitude of the adjustment is found to depend on the magnitude of the BSE scare.

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    File URL: http://purl.umn.edu/50121
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    Paper provided by International Association of Agricultural Economists in its series 2009 Conference, August 16-22, 2009, Beijing, China with number 50121.

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    Date of creation: 2009
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    Handle: RePEc:ags:iaae09:50121
    Contact details of provider: Web page: http://www.iaae-agecon.org/
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