The influence of swine fever on China’s pork market based on unit root tests

Abstract

Swine fever was introduced into China in August 2018 and has influenced Chinese pork market to a large extent. Based on the law of one price (LOOP) theory, this article selects data from January 1, 2014 to November 30, 2019, using unit root test and OLS to examine the convergence in China’s pork market relative to Beijing. It turned out that LOOP did not hold in China before the swine fever but hold after; Only three provinces showed the same results as the national context, while the data of all the other provinces remained stable, and there was no swine fever. Factors influencing the existence of LOOP are analyzed based on the previous results.Therefore, the results show that population, the length of classified highway and the introduction of swine fever are the significant factors; while the introduction of swine fever exerts the largest impact on LOOP in Chinese pork market.