Abstract
Animal disease is a major threat to the sustainability of the global livestock market. We explore the price risk spillover of avian influenza to the broiler market, from the perspective of public opinion. Unlike in previous work, where avian influenza is measured as a whole, we decompose an avian influenza epidemic into avian influenza outbreak and public opinion, measured by infection cases and Baidu and Google search volume. Theoretically, by introducing the theory of limited attention and two-step flow of communication, we develop an analytical framework to capture the causal mechanism of avian influenza outbreak, public opinion, and broiler price risk spillover, arguing that it is actually public opinion, not avian influenza outbreak alone, that directly causes broiler price risk. Empirically, using a long panel from China spanning from November 2004–November 2017, we examine the causal mechanism and analyse the nonlinear spatial spillover of public opinion to broiler price risk. We find that: (i) neither poultry nor human infection with avian influenza outbreak has a significant spillover to broiler price; (ii) on average, public opinion has a negative spillover to broiler price; in general, spillover of public opinion to broiler price is inverse U-shaped; (iii) on average, public opinion has a negative direct effect on local broiler price and a three times larger negative spatial spillover effect on nearby broiler price; in general, direct and spatial spillover effects are inverse U-shaped. Our research highlights the importance of studying public opinion in amplifying price risk when analysing spillover of animal disease to the global livestock market.
Highlights
Since the beginning of the new century, there has been a constant outbreak of major epidemic animal diseases around the world, such as avian influenza in East Asia in 2004 [1,2], swine flu (H1N1) in North America in 2009 [3] and African swine fever in 2018 [4], which pose a major threat to the sustainability of global livestock and poultry industry safety, food quality safety and public health safety [5].Prices in the global poultry market fluctuate greatly and frequently, which means every link of the poultry industry chain face great risks [6,7,8,9]
Our finding that neither poultry infection nor human infection with avian influenza outbreak has a significant spillover to broiler price is consistent with very few papers such as Han and Xu [99], finding that avian influenza epidemic has no significant impact on broiler price using annual panel data, whereas we differentiate between poultry infection and human infection using long monthly panel data which captures spillover effects much more accurately; our finding appears inconsistent with most previous studies that avian influenza epidemic has a significant impact on broiler price [11,12,106,107,108]
Our finding that public opinion on avian influenza has a spatial spillover to broiler price, is roughly in line with You and Diao [33] that the negative impact of an avian influenza epidemic on poultry production is unevenly distributed in Nigeria and Djunaidi and Djunaidi [32] that avian influenza epidemic in the United States, Economic Union and Brazil have a greater impact on world poultry export prices than other countries, both of which show preliminary spatial heterogeneity of the impact of an avian influenza epidemic on poultry production and price; whereas we focus on spatial dependence and explore spatial spillover of public opinion on avian influenza to broiler price
Summary
Since the beginning of the new century, there has been a constant outbreak of major epidemic animal diseases around the world, such as avian influenza in East Asia in 2004 [1,2], swine flu (H1N1) in North America in 2009 [3] and African swine fever in 2018 [4], which pose a major threat to the sustainability of global livestock and poultry industry safety, food quality safety and public health safety [5].Prices in the global poultry market fluctuate greatly and frequently, which means every link of the poultry industry chain face great risks [6,7,8,9]. Since the beginning of the new century, there has been a constant outbreak of major epidemic animal diseases around the world, such as avian influenza in East Asia in 2004 [1,2], swine flu (H1N1) in North America in 2009 [3] and African swine fever in 2018 [4], which pose a major threat to the sustainability of global livestock and poultry industry safety, food quality safety and public health safety [5]. The price risk spillover of an avian influenza epidemic along with public opinion to the poultry market in the age of big data deserves the special attention of global academia and authorities
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