Date of Award:

5-2011

Document Type:

Dissertation

Degree Name:

Doctor of Philosophy (PhD)

Department:

Economics and Finance

Advisor/Chair:

Dr. DeeVon Bailey

Abstract

The first native-born case of Bovine Spongiform Encephalopathy (BSE or commonly known as Mad Cow Disease) in North American continent was reported on 20 May 2003 in central Alberta, Canada. The first case of BSE in the United States was announced on 23 December 2003.

My dissertation is divided into three essays on the economic impact of the outbreak of Bovine Spongiform Encephalopathy (BSE) in the United States in December 2003. The first essay focuses on quantifying the impact of the outbreak of BSE in the United States and Canada on the stock returns of major publicly traded agribusiness firms and restaurant companies in the United States. Event study methodology has emerged to be the best way to analyze the impact of such events on the stock prices. The results of the analysis showed that at an aggregate level firms did not respond significantly to the announcement in May 2003 but the same firms did react to the news of BSE in the United States in December 2003. The individual company-wise and the group-wise results were mixed for both May and December 2003 events.

The second essay used the techniques of vector error correction models along with historical decomposition techniques to analyze the impact of mad cow disease on the prices in the beef, pork, and poultry markets. To analyze the interdependence in the meat sector, this essay uses the technique of directed acyclic graphs (DAG). The results of the study indicate interdependencies in the beef, pork, and poultry markets in the United States. That is, a shock in one series has an impact on other series too. There is vertical as well spatial price transmission in the meat markets, though the transmission is not perfect. The different speeds of adjustment point to asymmetric price transmission. Also, the magnitude of the mad cow disease shock was different in different markets indicating asymmetry in terms of both speeds of adjustment and magnitude.

The focus of the third essay is to test for any structural change in the demand function for US beef in the major US beef importing countries - South Korea, Japan, Canada, and Mexico. This paper estimates a beef export demand function for the United States and conducts tests for structural changes using the Chow test and the CUSUM test.

Comments

This work made publicly available electronically on May 11, 2011.

Included in

Economics Commons

Share

COinS