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http://dx.doi.org/10.7856/kjcls.2015.26.1.75

An Impact Analysis of FMD News on Pork Demand in Korea  

Gim, Uhn-Soon (Dept. of Agricultural Economics, Chungnam National University)
Choi, Se-Hyun (Dept. of Agricultural Economics, Pusan National University)
Cho, Jae-Hwan (Dept. of Agricultural Economics, Pusan National University)
Publication Information
The Korean Journal of Community Living Science / v.26, no.1, 2015 , pp. 75-85 More about this Journal
Abstract
This study investigates the impact of livestock diseases, including FMD(foot-and-mouth disease) and MCD(mad-cow disease), on pork demand in Korea. TV news stories about the livestock diseases were considered as negative advertising, and therefore the carry-over effect of negative advertising was combined with the pork demand model in conjunction with an exponential distributed lag function. The asymmetry hypothesis was imposed, however it was accepted that demand response does not show different sensitivities to increases and decreases in the livestock disease news. FMD news had a negative effect on pork demand, whereas MCD news had a positive effect, yet FMD news had a greater effect on pork demand than MCD news. The pork demand elasticity estimates for FMD and MCD news were -0.0071 and 0.0028, respectively. The cross-elasticity of the imported beef price to pork demand was highly inelastic, but it was elastic during the beef import embargo.
Keywords
FMD(foot-and-mouth disease); MCD(mad-cow disease); pork demand; carry-over effect; distributed lag function;
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