Japanese beef trade impact from BSE using a time‐varying Armington model

Abstract

AbstractThis study examines the persistent impacts of the bovine spongiform encephalopathy (BSE) outbreak in the United States on Japanese beef demands. An Armington model with time‐varying parameters allows us to separate BSE effects from other factors. A counter‐factual case estimates that, if the BSE outbreak had not occurred, demand for Australian beef would have been lower and demand for U.S. beef would have been higher, with domestic beef demand only modestly affected. The BSE outbreak affected imported frozen beef demands more than imported chilled beef demands. Our estimation method is relevant for researchers studying the impacts of disease‐related or other trade disruptions, as well as to traders and policy makers with interest in Japanese beef markets. [EconLit citations: F14, Q17].